RSUs taxation after moving out of state

[papibane]

I used to live in NJ and work off a NY office. I moved to Florida sometime last year and wondering how should RSUs that vested after moving out of NJ be treated.

My employer reported this last batch of RSUs that vested after I moved to FL as NY income and took out NY taxes, but the amount was NOT included as NJ income in my W-2.

Should these RSUs be allocated as NJ income as well for the amount of time I lived in NJ since the grant date?

In that case, should I be doing both a part-time NJ resident return and a non-resident return for NJ?

[DanielV01]

New York requires that the amount considered vested for having performed New York-sourced labor be considered taxable to New York.  If that work was performed while you were a New Jersey resident, that same income should be included with your New Jersey part-year resident return as well as all other income earned while a New Jersey resident.  As with other types of income, New Jersey will give you a credit for the tax you pay to New York on this income.

[papibane]

Thank you for the response, Daniel. That was also my understanding.

Then my only concern is, for future years where I still will have some vesting events for RSUs that were granted while I lived in New Jersey, would I still need to do a non-resident return for New Jersey for the portion of the time between the grant date and the date I moved for that specific grant?

[DianeW777]

No, once you moved to Florida, the vesting events will continue to be taxable to New York because it is New York sourced labor.  Since you are no longer a New Jersey resident you will not need to file a New Jersey return. And because Florida has no personal income tax, you will not receive any credit for the taxes you must pay to New York.

[papibane]

So for this last batch of RSUs that vested after I moved to Florida, wouldn't that also be the case?

I also asked my employer, as the income from the last vesting event wasn't included as New Jersey income, so wondering if New Jersey is entitled to taxes on some of this income due to the fact I used to be a New Jersey resident when these RSUs were granted. 

[DanielV01 · Accepted solution]

Whether you do or don't report the income to New Jersey, the final result should be the same because if you have to claim it as NJ income, it will still be eligible for any tax you pay on that income to New York, which almost certainly will be more than what NJ would tax the same income.  You could report it as "Florida" income (no state tax), since that's where you lived when it vested, but it doesn't matter as far as New York is concerned.  It's still New York "sourced" because it was generated or compensated by your New York employment.  

If you decide not to claim it to New Jersey, retain documentation in case the state asks questions on it.

[Dmitry1]

Did TurboTax generate non-resident return for you for New York to report a portion of the vested RSUs?