It depends. When you receive an RSU, you don't have any immediate tax liability. You only have to pay taxes when your RSU vests and you receive an actual payout of stock shares. At that point, you have to report income based on the fair market value of the stock. In addition, if you sell your shares of stock after receiving, you may need to pay taxes on the sale of the stock. The amount of tax is dependent on three things according to this article from Turbo Tax. If you sell the stock at a higher price than its fair value at the time of vesting, you'll have a capital gain. If you hold the stock for less than one year, your gain will be short term, and you'll owe ordinary income tax on it. If you hold the stock for one year or more, your gain will be long term, meaning you'll pay tax at the more favorable capital gains rate.The amount of tax that the IRS or the State of California may take will depend on whether it will be taxed on ordinary income or the capital gains rate depending on the nature of the transaction. [ Edited 12/28/21| 03:29 PM PST]

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Currently i am in usa and holding rsus . i am planning to move to india next year. when i sell shares from india how are they taxed in usa. how much does fed and ca take

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December 28, 2021
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Best answer by Opus 17

@satya-pat

(If you are a US citizen or green card holder, you pay US tax on all your worldwide income no matter where you are living according to all the usual rules. It seems from your question that you might not be a US citizen.)

If you are not a US citizen or green card holder, and you live overseas in 2022 (less than 182 days in the US) you are a non-resident alien and you file a form 1040-NR. You only pay US income tax on US-sourced income. Likewise, as a CA non-resident, you pay CA income tax on your CA-source income.

Your RSUs are US source income to the extent you worked in the US between the granting and vesting dates. For example, suppose the RSUs were granted July 1, 2019, and you continue to work for the employer, you leave the US on 12/31/21, and you sell the RSUs on 6/30/2022. Since you lived and worked 5/6th of the vesting time in the US, 5/6th of any income will be considered US-source and be subject to US tax on a 2022 form 1040-NR.
https://www.jdsupra.com/legalnews/globally-not-so-mobile-employees-17014/

The stockbroker may be required to withhold up to 30% of any sales proceeds, if you are a non-resident alien. You would get credit for this withholding on your tax return which would probably generate a tax refund. You will want to check with the stockbroker before you make the sale.

DaveF1006

It depends. When you receive an RSU, you don't have any immediate tax liability. You only have to pay taxes when your RSU vests and you receive an actual payout of stock shares. At that point, you have to report income based on the fair market value of the stock.

In addition, if you sell your shares of stock after receiving, you may need to pay taxes on the sale of the stock. The amount of tax is dependent on three things according to this article from Turbo Tax.

If you sell the stock at a higher price than its fair value at the time of vesting, you'll have a capital gain.
If you hold the stock for less than one year, your gain will be short term, and you'll owe ordinary income tax on it.
If you hold the stock for one year or more, your gain will be long term, meaning you'll pay tax at the more favorable capital gains rate.

The amount of tax that the IRS or the State of California may take will depend on whether it will be taxed on ordinary income or the capital gains rate depending on the nature of the transaction.

[ Edited 12/28/21| 03:29 PM PST]

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satya-patAuthor

HI

Thanks For getting back.

Here is the situation:

1. currently i am in USA and my rsus are longterm[holding them from 3 years]

2. i am moving out from usa to india on dec 30th.

3. say i sell the rsus from india in 2022 and i make 100k profit( long term gains) and i dont have any other income in USA

how will this amount be taxed in USA. how much will fed and ca hold?

O

Opus 17Answer

Employee

@satya-pat

(If you are a US citizen or green card holder, you pay US tax on all your worldwide income no matter where you are living according to all the usual rules. It seems from your question that you might not be a US citizen.)

If you are not a US citizen or green card holder, and you live overseas in 2022 (less than 182 days in the US) you are a non-resident alien and you file a form 1040-NR. You only pay US income tax on US-sourced income. Likewise, as a CA non-resident, you pay CA income tax on your CA-source income.

Your RSUs are US source income to the extent you worked in the US between the granting and vesting dates. For example, suppose the RSUs were granted July 1, 2019, and you continue to work for the employer, you leave the US on 12/31/21, and you sell the RSUs on 6/30/2022. Since you lived and worked 5/6th of the vesting time in the US, 5/6th of any income will be considered US-source and be subject to US tax on a 2022 form 1040-NR.
https://www.jdsupra.com/legalnews/globally-not-so-mobile-employees-17014/

The stockbroker may be required to withhold up to 30% of any sales proceeds, if you are a non-resident alien. You would get credit for this withholding on your tax return which would probably generate a tax refund. You will want to check with the stockbroker before you make the sale.