Question

RSU Vesting in two countries

Forum|Forum|6 years ago
February 9, 2020
1 reply
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Hi All,

I had my RSU granted in India in 2016 and I moved to US in Apr-19 in same company.

I had my portion of the original grant vested in Sept-2019. The entire vested amount was reported to the US tax authority in W2 and also 90% of the amount was reported to India taxation.

I feel this way i am going to pay taxes to both the countries on the entire amount and would be taxed twice.

I know that my taxes should be paid to both the countries like entire vested amount should be proportionately divided among two countries and taxes should be paid accordingly but this is not happening in current scenario.

For Eg: Let's Assume I had shares vesting of 20000$ in current year which are granted after completing 3 years of which i lived in India for 2.5 years and .5 year in US. So ideally, i should be paying taxes on 2.5/3 * 20000 = 16666$ to India and the remaining 3333$ to US government.

However my entire 20000$ is reported in US W-2 as US income and also 16666$ (1166620 INR) is also reflecting in my India Income Form26AS for the same year. This way i am actually paying taxes on 20000+16666 $ and not on 20000$ which should have been the case.

Kindly help me understand the situation here. Am I missing something?

Not A Product Question

D

DavidD66

If you are filing as a Resident Alien, then the entire amount that was reported on your W-2 is taxable on your U.S. tax return. You cannot pro-rate it based on the amount of time you were living in the US while it vested. If you also paid (or will pay) foreign tax on the same income, you can a credit on your tax return for foreign tax paid. If you are filing as a non-resident alien for the period that included the payment of the RSUs, then that is out of the scope of TuboTax, and you will have to see advice elsewhere.

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