NJ RSU taxation after moving to WA

Forum|Forum|10 months ago
May 15, 2025
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I saw a similar post on this but it was about two states with reciprocity. I moved in 2024 to WA but I'm paying taxes on RSU vesting in 2025 to NJ.

This doesn't make sense to me as the taxable event took place in 2025. I'm not a NJ resident, and I'm a full time Washington resident.

Best answer by NCPERSON1

@tvdaredevil okay. this is messy.

NJ takes the position that those RSUs were issued as a result of your work in NJ. So they do tax the RSUs based on a formula: number of days worked in NJ during the vesting period divided by the total number of days in the vesting period.

Example: the vesting period is 3 years. You moved from NJ 6 months after the RSUs were issued to you. Upon vesting 1/6 of the income is taxable in NJ.

NCPERSON1

@tvdaredevil how are you "paying taxes" on a 2025 event? the only place taxes are determined is on a tax return....and calendar year 2025 tax returns will not be completed until 2026.

are you really asking why NJ taxes were withheld from your transaction? withholdings are not "tax". Rather it is a "down payment" against the taxes that are presumed to be due comes early 2026.

if the taxable event occurred while you were living in WA, then there is no tax due to NJ. You would have to complete a non-resident tax return next year to get the withholdings back.

tvdaredevilAuthor

@NCPERSON1 I'm paying taxes on my RSU vesting. When my employer gives me company shares, its treated as compensation and so some shares are sold to cover tax liabilities, while it makes sense for the federal government to get taxes. Why is NJ getting taxes when I don't domicile there anymore?

NCPERSON1Answer

@tvdaredevil okay. this is messy.

Example: the vesting period is 3 years. You moved from NJ 6 months after the RSUs were issued to you. Upon vesting 1/6 of the income is taxable in NJ.