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Where on a W2 are the taxes paid on your RSUs when they vest?

Forum|Forum|2 years ago
January 28, 2024
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It's my understanding this should be in Box 14 of my W2, but said box is empty.

Only "Box 12c V" is populated with the total value of my shares at vest (no taxes taken out) even though taxes were in fact taken out on the vest date in July 2023 & were documented in a "Release Confirm" doc provided by the custodian that held the RSUs / then later shares once they vested.

I can also see Box 1 of my W2 an amount that exceeds my salary with 401k income taken out, leading me to believe some portion of the vested share value was added to it as taxable income.

Thus, if the value of the shares taken out as taxes are not in Box 14 then where would this be listed on my W2?

Should I manually enter it based on the "Release Confirm" doc that contains it from the Brokerage Firm / Custodian of them?

Some background:

I received company RSUs in July 2022, which vested in July 2023.
On the vest date in July 2023, taxes were automatically taken out in the form of shares.
Ex. They deducted around 35% of my shares as taxes e.g. 100 shares on vest date - 35 taken out for taxes leaves me with 65 shares.
I received a "Release Confirm" doc from the Brokerage Firm / Custodian breaking down the total vest share value, cost basis, value of share taxes taken out, left over shares & their value, etc.
In August 2023 I sold all shares & received a 1099-B in 2024, which I've entered into TurboTax as a sale of Restricted Stock Units.

Thank you.

Best answer by ThomasM125

The tax would be reported in box 2, 4 and 6 on your W-2 form, like they are for your wages. It if possible that just social security and Medicare taxes were withheld and that is why you don't see any income tax for the RSU sales in box 2 for your federal income tax withheld. Box 1 would include the value of the shares when they vested.

The 1099-B form may not list the correct cost basis of the shares sold, which would be the value reported in box 1 divided by the number of shares vested, times the number of shares sold during the year. If not, you would need to adjust the cost basis after you enter the Form 1099-B. You will see an option for that on the screen where you enter the cost basis in TurboTax.

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ThomasM125Answer

The tax would be reported in box 2, 4 and 6 on your W-2 form, like they are for your wages. It if possible that just social security and Medicare taxes were withheld and that is why you don't see any income tax for the RSU sales in box 2 for your federal income tax withheld. Box 1 would include the value of the shares when they vested.

The 1099-B form may not list the correct cost basis of the shares sold, which would be the value reported in box 1 divided by the number of shares vested, times the number of shares sold during the year. If not, you would need to adjust the cost basis after you enter the Form 1099-B. You will see an option for that on the screen where you enter the cost basis in TurboTax.

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uk05Author

Taxes were taken out of the RSUs on vest date. Box 2 (fed taxes withheld) & Box 17 (state taxes) of my W2 likely contain the taxes taken out because the amount of federal & state taxes I'm paying are significantly larger than last year in 2022 when I didn't have any RSU taxes to report.

The cost basis info is also correct on my 1099-B from when I sold the stock for a slight gain.

It's just confusing that my W2 lists the full RSU vest amount in "Box 12c V" but doesn't also itemize the taxes paid & lumps them into Boxes 2 & 17. From what I've read I though perhaps it would be listed in Box 14 but that's empty.

I'll talk to my company's HR department & payroll regarding this.

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ThomasM125

The income tax withheld payments are in the proper boxes on your W-2 form. It is not customary to list the taxes withheld on the RSU sales on your W-2 form separately. I agree that they could be listed in box 14 but that is rarely done in my experience.

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Phmlalsc2000

I have a follow up question to this. By the time my RSUs were reported on my paystub as compensation, I already had the maximum social security taxes withheld for the year. However, I can see from my Release Confirmation that social security taxes were withheld at the time of the sell-to-cover. On my paystub, I can see the federal, Medicare and state tax withholdings, but the additional Social Security withholding is not reported. It’s not on my W2 so how do I get that excess refunded to me?

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ThomasM125

The social security tax would only be reported on your W-2 form. I suggest you ask your employer why it doesn't show up there. They may not have paid it in to the IRS in which case they should refund it to you.

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Phmlalsc2000

Thanks. I’m trying to get an answer from my employer. Do you know if it’s common for the RSU compensation to be reported with such a delay? They vested in April, but didn’t report on my paystub until October. Had they reported in April, this may have been avoided.