If you've received company stock as part of your compensation, you might notice an RSU entry in Box 14 of your W-2 form. This can be confusing when you're trying to understand how your stock compensation affects your taxes.

Box 14 RSU shows the value of your vested restricted stock units for informational purposes, but this amount is already included in your total wages in Box 1. Many employers use Box 14 as a catch-all section to help you understand how much of your total compensation came from stock versus regular salary.

Key Takeaways

• RSU amounts in Box 14 are informational only and already included in your Box 1 wages.
• You'll be taxed on the fair market value of RSUs when they vest, not when you sell them.
• Selling vested RSUs creates additional tax reporting requirements on Form 8949 and Schedule D.

What Is Box 14 RSU on the W-2?

Box 14 RSU shows the value of restricted stock units that vested during the tax year as supplemental information. This amount is already included in your regular wages in Box 1 of your W-2 form.

Purpose of Box 14 on the W-2

Box 14 serves as a space for employers to report miscellaneous compensation items that don't fit in the standard boxes. The information in Box 14 is supplemental information your employer provides to help with your tax preparation.

When I receive restricted stock units as compensation, my employer uses this box to show me exactly how much RSU income I earned. This helps me understand what portion of my total wages came from stock compensation versus regular salary.

The RSU amount in Box 14 appears for informational purposes only. I don't have to do anything with the amount in Box 14 because it's already counted in my total wages.

How Employers Report RSU Income

Employers report RSU income in Box 14 "Other" on your W-2, listing the total dollar amount followed by the acronym "RSU." My employer calculates this value based on the fair market value of the stock when my restricted stock units vest.

When my RSUs vest, I immediately recognize taxable income. My employer includes the shares' value in my total wages for the year, even if I don't sell the stock right away.

My employer also handles tax withholding on RSU income. Taxes withheld appear in Box 2 (Federal income tax withheld), Box 4 (Social Security tax withheld), and Box 6 (Medicare tax withheld).

Common Codes and Notations for RSUs

The most common notation I'll see is simply "RSU" followed by the dollar amount. Some employers might use variations like "Imputed RSU" or provide more detailed breakdowns.

Some employers provide a breakdown in Box 14 of the W-2, labeling the RSU income amount with specific codes or descriptions. These might include:

• RSU - Basic restricted stock unit notation
• Imputed RSU - Shows the assigned fair market value
• Stock Comp - General stock compensation notation

No standard list of codes exists for all employers. Each company can choose how to label their RSU reporting in Box 14.

How RSU Vesting Affects W-2 and Income Reporting

RSU vesting creates taxable income at the fair market value of the shares on the vesting date. This income appears in Box 1 of your W-2 alongside your regular wages, while Box 14 provides additional details about the RSU amounts for your records.

When RSU Income Is Recognized

I recognize RSU income on the exact date my restricted stock units vest, not when I receive or sell the shares. The vesting date triggers a taxable event regardless of whether I keep the stock or sell it immediately.

My employer calculates the taxable income using the stock's fair market value on the vesting date. If my company's stock trades at $50 per share and 100 RSUs vest, I have $5,000 in taxable income.

The timing matters for tax purposes. RSUs that vest on December 31st count as income for that tax year, even if I don't see the shares in my brokerage account until January.

My employer typically withholds taxes when RSUs vest by selling some of my shares automatically. This withholding covers federal income tax, Social Security, Medicare, and state taxes if applicable.

RSU Vesting and Taxable Wages in Box 1

My vested RSU income gets added to my regular salary and appears in Box 1 of my W-2 as total wages. RSUs count as ordinary income, not capital gains, when they first vest.

Box 1 shows my combined compensation from salary, bonuses, and vested RSUs. I cannot separate these amounts just by looking at Box 1 alone.

The RSU income in Box 1 gets taxed at my regular income tax rates. For 2025, this ranges from 10% to 37% based on my total taxable income.

My employer also includes vested RSU income in Boxes 3 and 5 for Social Security and Medicare tax calculations. This subjects my RSU income to payroll taxes just like regular wages.

Difference Between Box 1 and Box 14 with RSUs

Box 1 includes all my taxable wages, including vested RSU income mixed with my regular salary. Box 14 breaks out the specific RSU amounts for my reference and record-keeping.

The Box 14 RSU amount is already included in Box 1, so I don't report it as additional income on my tax return. Box 14 serves as informational detail, not extra taxable income.

I use Box 14 to track my cost basis for future stock sales. When I eventually sell RSU shares, my cost basis equals the fair market value reported as income when they vested.

Key differences:

• Box 1: Total wages including RSU income
• Box 14: RSU income breakdown for tracking purposes
• Tax impact: Only Box 1 affects my taxable income calculation

Tax Withholding and Payroll Implications of RSUs

When my RSUs vest, employers typically manage initial tax withholding similar to regular payroll. The process involves federal, state, and payroll taxes that require careful attention.

Most companies use automatic share sales to cover my tax obligations at vesting.

Federal and State Withholdings on RSU Vesting

My employer treats vested RSUs as regular income for tax purposes. The full value of RSUs appears as wages on my W-2, calculated at fair market value on the vesting date.

Federal income tax gets withheld at my regular payroll rate or a flat supplemental rate. This rate might be 22% for federal taxes, but it depends on my total income.

State tax withholding follows my state's rules. Some states have no income tax, while others may withhold at rates between 3% and 13%.

My final paystub should match Box 2 on my W-2 for total federal tax withheld. I should check this to make sure my employer handled withholding correctly.

If my employer withholds too much or too little, I may need to adjust my Form W-4 for future RSU vesting events.

Medicare, Social Security, and Payroll Tax Considerations

My RSU income gets subject to Social Security and Medicare taxes, which appear in Boxes 3 and 5 of my W-2. These payroll taxes apply to the full vested value.

Medicare Tax:

• 1.45% on all RSU income
• Additional 0.9% if my total wages exceed $200,000

Social Security Tax:

• 6.2% on RSU income up to the annual wage base limit
• No Social Security tax on RSU income above this limit

My employer pays matching amounts for Social Security and Medicare. These payroll taxes get calculated on both the shares I keep and any shares sold for tax withholding.

Sell-to-Cover and Taxes Paid with RSUs

A common practice is "sell-to-cover," where my employer automatically sells some vested shares to cover required income, Social Security, and Medicare tax withholdings.

How Sell-to-Cover Works:

• My RSUs vest and become taxable income.
• My employer calculates taxes owed.

Enough shares get sold to cover the tax bill. I receive the remaining shares.

Both the shares I keep and those sold for taxes appear as income on my W-2. The taxes paid through share sales show up in the federal and state withholding boxes.

I might still owe additional taxes at filing time if the withholding wasn't enough. This happens when my actual tax rate exceeds the withholding rate used by payroll.

RSU Sales, Cost Basis, and Subsequent Tax Forms

When you sell RSU shares, you'll receive a 1099-B form from your broker that reports the sale proceeds. The key challenge is determining your correct cost basis to avoid paying taxes twice on the same RSU income.

Form 1099-B and Reporting RSU Stock Sales

Your brokerage will send you a Form 1099-B when you sell any vested RSU shares. This form shows the proceeds from your stock sale.

The 1099-B may show zero or blank cost basis information. Brokers don't always track the cost basis for restricted stock units correctly.

Some shares on your 1099-B might only include shares sold to pay tax withholding on RSU vesting. You need to separate these from shares you sold voluntarily.

You must report all RSU stock sales on your tax return using Schedule D. This includes both shares sold for taxes and shares you chose to sell later.

Calculating the Cost Basis with RSU Income

Your cost basis for RSU shares equals the fair market value on the vesting date. This is the same amount that was included in your W-2 wages.

The RSU income establishes your cost basis for any future stock sales. You already paid income tax on this amount when the restricted stock units vested.

If your broker's 1099-B shows incorrect cost basis information, you must calculate it yourself. Use the vesting date value from your RSU records or supplemental tax forms.

Key calculation steps:

• Find the fair market value per share on vesting date.
• Multiply by the number of shares you received.

This total should match your W-2 Box 14 RSU amount. You need to allocate the RSU value between shares sold for taxes and shares you kept.

Implications for Capital Gains Tax

Any gain or loss from selling RSU shares after vesting creates a capital gains tax situation. You calculate this by comparing your sale price to your cost basis.

If you sell shares within one year of vesting, you'll pay short-term capital gains rates. These rates match your ordinary income tax rates.

Selling shares more than one year after vesting qualifies for long-term capital gains rates. These rates are typically lower than ordinary income rates.

Capital gains calculation:

• Sale proceeds (from 1099-B)
• Minus cost basis (RSU value at vesting)
• Equals capital gain or loss

The RSU income amount in Box 14 is separate from any capital gains. You already paid income tax on the RSU value when the stock units vested.

Key Considerations and Best Practices for Employees with RSUs

Managing RSU income requires careful attention to tax reporting and verification to avoid costly mistakes. The most critical steps involve preventing double taxation, confirming accurate payroll reporting, and knowing when professional help is needed.

Avoiding Double Taxation on RSU Income

Double taxation occurs when I pay taxes on the same RSU income twice. This happens most often when I don't properly track what's already been taxed at vesting versus what needs reporting at sale.

When my restricted stock units vest, the full market value becomes taxable income. My employer includes this amount in my W-2 wages and withholds income tax automatically through payroll.

If I later sell the shares, I only owe taxes on any gain above the vesting price. The original vesting value should not be taxed again.

Here's how to track this correctly:

I should keep detailed records of vesting dates and share prices. This documentation proves what income tax I already paid through my employer's payroll system.

Verifying Accurate RSU Reporting

I need to verify that my employer correctly reported RSU income and taxes withheld on my W-2. Checking my final paystub against my W-2 helps confirm accuracy.

The total income tax withheld on my last paystub should match Box 2 on my W-2. This includes all taxes paid from RSU share sales during the year.

My RSU income should appear in Box 1 (total wages) on my W-2. Box 14 may show RSU amounts for information purposes, but this is not required by all employers.

I should compare these key items:

• Box 1: Total wages including RSU vesting value

• Box 2: Federal income tax withheld from all sources

• Final paystub: Year-to-date totals should match W-2 amounts.

If the numbers don't match, I need to contact my payroll department immediately. Incorrect reporting can lead to paying too much or too little tax.

When to Consult Payroll or Tax Professionals

I should contact my payroll department when W-2 amounts don't match my final paystub totals. They can explain how RSU income and withholding were calculated throughout the year.

Complex RSU situations require professional tax help. These include multiple vesting dates, stock sales in different tax years, or confusion about which tax forms to expect.

A tax professional becomes essential if I have:

• RSUs from multiple employers
• Stock options mixed with restricted stock units
• International tax complications from foreign employers
• Large RSU income pushing me into higher tax brackets

Early consultation saves money and stress. Tax professionals can help me plan for future RSU vestings and optimize my overall tax strategy.

I should gather all equity compensation documents before meeting with any professional. This includes grant agreements, vesting schedules, and all tax forms related to my restricted stock units.

Frequently Asked Questions

RSU reporting involves understanding how vested stock units appear on your W-2 and additional tax forms. Most questions focus on proper reporting methods, interpreting Box 14 entries, and avoiding double taxation issues.

What is the correct way to report RSU sales on my tax return?

I report RSU sales by using the information from my 1099-B form along with my W-2. The RSU value shown in Box 14 represents my cost basis when I sell the shares.

I enter the sale details on Schedule D of my tax return. The difference between my sale price and the vested value becomes my capital gain or loss.

I don't report the vesting event separately since it's already included in my wages. Only the gain or loss from selling needs additional reporting.

How should I interpret the RSU entries in W-2 Box 14?

The RSU entry in Box 14 shows the total dollar value of stock units that vested during the tax year. This amount is already included in my Box 1 wages.

Box 14 serves as supplemental information to help me understand how much of my total wages came from vested stock. It doesn't change my tax liability.

I use this information to calculate my cost basis when I sell the shares later. The Box 14 amount becomes my starting point for determining capital gains.

Are there specific codes in W-2 Box 14 for RSU reporting, and what do they mean?

I typically see "RSU" as the standard code in Box 14 for restricted stock units. Some employers provide this breakdown for clarity since the income is already included in main wage boxes.

The RSU code helps me identify which portion of my compensation came from stock vesting. This makes tax preparation easier when I need to track my basis.

Some companies might use variations of RSU codes, but they all refer to the same type of stock compensation. I check with my employer if I see unfamiliar codes.

What should I do if my RSU tax withheld amounts are not reflected on my W-2?

I first verify that my RSU withholding appears in the standard tax boxes on my W-2. Federal taxes withheld should show in Box 2, and state taxes in the appropriate state boxes.

If I don't see the withholding reflected, I contact my payroll department immediately. They may need to issue a corrected W-2 form.

I keep all my pay stubs and RSU vesting statements as backup documentation. These records help me prove the correct withholding amounts if there are discrepancies.

Can you explain why RSUs might be reported on both a W-2 and a 1099 form?

My W-2 reports the RSU vesting as ordinary income when the shares become mine. The 1099-B reports the actual sale of those shares to a third party.

These forms serve different purposes in my tax situation. The W-2 handles the compensation aspect, while the 1099-B tracks the investment transaction.

I won't face double taxation because the vesting value becomes my cost basis for calculating gains or losses on the sale. Only the difference between vesting value and sale price affects my additional taxes.

Is it necessary to adjust my tax filings if I have an after-tax contribution category listed in Box 14 for RSUs?

After-tax RSU contributions typically don't require special adjustments to my regular tax filing process.

The vested RSU value is still taxable income regardless of how taxes were handled.

I review my pay stubs to understand how my employer processed the after-tax treatment.

This helps me verify that my W-2 reflects the correct tax withholding amounts.

If I made additional after-tax payments for RSU taxes, I ensure those payments appear in my total tax withholding boxes.

This prevents underpayment issues with the IRS.