[{"data":1,"prerenderedAt":7},["ShallowReactive",2],{"faq-standard-7928":3},{"rec_id":4,"title":5,"text":6},"7928","RSU (Restricted Stock Units)","RSU's are similar to incentive stock options (ISO) but an RSU is taxed when it vests whereas an ISO is taxed when it's exercised. \n\u003Cbr>\u003Cbr>\nWhen the RSU vests, the total value of the vested RSU shares will be included in your wages shown in \u003Ci>Box 1\u003C/i> of your \u003Ci>W-2\u003C/i>, so they are taxed as wages. However, you will also receive a \u003Ci>Form 1099-B\u003C/i> or consolidated 1099 when you sell some or all of the shares. To avoid double taxation, you need to include in the cost basis of the stock the amount already included in income on your \u003Ci>W-2\u003C/i>.\n\u003Cbr>\u003Cbr>\nFor example, if you had 100 RSUs vest in 2025 with a total value of $1,000, then the $1,000 will be included with your regular wages in \u003Ci>Box 1\u003C/i> of your \u003Ci>W-2\u003C/i> and taxed as ordinary wage income. The cost basis in the 100 RSU shares is $1,000. If 20 RSU shares were sold by your employer to cover the tax withholdings, then $200 would have been included in your federal and state tax withheld shown on your \u003Ci>W-2\u003C/i>. You would get a \u003Ci>Form 1099-B\u003C/i> or consolidated 1099 showing stock sale proceeds in \u003Ci>Box 1d\u003C/i> of $200. You would report that $200 as stock sold and your cost basis in the stock sold would also be $200 so there would be a capital gain of $0. The \u003Ci>Form 1099-B\u003C/i> or consolidated 1099 might not show any cost basis in \u003Ci>Box 1e\u003C/i>, but you do have cost basis from the amount already taxed on the \u003Ci>W-2\u003C/i> and if you don't enter the cost basis then the income will be double taxed on your return.\n\u003Cbr>\u003Cbr>\nContinuing the example, if you hold on to the remaining 80 shares for a few years, then sell all 80 shares, you will get another \u003Ci>Form 1099-B\u003C/i> or consolidated 1099 for that year you made the second sale. In this case your cost basis would be $800 for the remaining 80 shares sold. The sales proceeds in \u003Ci>Box 1d\u003C/i> of the \u003Ci>Form 1099-B\u003C/i> or consolidated 1099 will be whatever the sales price was on the day the stock was sold.\n\u003Cbr>\u003Cbr>\n\u003Ca href=\"/freefile2025/answers?faq=12103\">How do I find my cost basis for employee stock?\u003C/a>",1777391472307]