RSU vesting and living in two states

[yashK]

Hello

I lived in Colorado till May 2021 and moved to Michigan in June 2021. My RSUs were allocated to me in 2020 when I was in Colorado but they were vested for the first time in Aug 2021 when I started living in Michigan. My employer sells some stocks to cover taxes. I see in my W2 and in my paystubs thet my employer has withheld all the RSU related taxes to the state of Michigan. Is that correct ? Do I need to pay all the taxes on my vested RSUs to the Michigan state or do I need to make calculations about how many days I lived in state of Colorado and fill my taxes accordingly

[RobertB4444]

You don't own anything until your vesting date.  You were living in Michigan on your vesting date.  I would go with the simplest option and make them all taxable only in Michigan.

[yashK]

@RobertB4444 Someone told me about this document

Colorado considers restricted stock unit proceeds to be taxable to nonresidents. The state says:

Income from the exercise of employee stock options is Colorado-source income if such income is treated as compensation for federal tax purposes and to the extent the employee worked in Colorado during the period the employee was required to work for the employer prior to the exercise of the option.

See GIL 20-004 December 18, 2020

Do you think that I do not need to pay anything to Colorado for RSUs 

[DianeW777]

No.  As indicated by our awesome Tax Expert @RobertB4444 the vesting date is the date that matters.  You were not vested, and did not have a right to the stock until after you moved to Michigan, at which time you were fully vested.  The tax ramifications should only apply to Michigan.

[depreciatedasset]

This isn't correct. You need to look at each State's tax code. The grant date is absolutely important to states like CA. This isn't as simple as constructive receipt of income - states have different rules and yes, the grant date starts the taxation clock in many states, regardless of where vested.