Is restricted stock considered income?
Is restricted stock considered income?
Taxation. With RSUs, you are taxed when the shares are delivered, which is almost always at vesting. Your taxable income is the market value of the shares at vesting. You have compensation income subject to federal and employment tax (Social Security and Medicare) and any state and local tax.
Is restricted stock reported on W2?
Restricted stock units (RSUs) are company shares granted to employees. The fair market value of the stock becomes part of their wages for the year and is reported on their W-2 form at tax time. RSUs are considered income, so your employer must withhold taxes.
Are restricted stock grants taxable?
If you’re granted a restricted stock award, you have two choices: you can pay ordinary income tax on the award when it’s granted and pay long-term capital gains taxes on the gain when you sell, or you can pay ordinary income tax on the whole amount when it vests.
How do I sell my RSU on Etrade?
Selling your shares
- Log on to etrade.com.
- From my Stock Plan Overview page, click the Sell tab.
- Choose your price type by selecting one of the following:
- Enter the number of shares you would like to sell from each of your tranches.
- Select how you would like to receive your proceeds.
What is the difference between performance shares and restricted stock?
Standard restricted stock units (RSUs) are similar, except that the shares are not issued into your actual possession until the vesting occurs. Performance shares are not issued up front and are usually part of a long-term performance or incentive plan (LTIP).
What is a dividend equivalent unit?
Dividend Equivalent Unit means the right to receive a payment, in cash or Shares, equal to the cash dividends or other distributions paid with respect to a Share.
Are dividends paid on restricted stock units?
RSUs do not offer voting rights until actual shares are issued at vesting. No Dividends. RSUs cannot pay dividends, because no actual shares are used (employers can pay cash dividend equivalents if they choose).
How are restricted stock dividends taxed?
Dividend equivalents paid on restricted stock units are treated as compensation income and will be subject to federal income tax when paid to the employee. In that case, the dividend equivalents are subject to federal income tax when they are paid out, along with the shares underlying the award.
