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In 2016, when I started at my current employer, I received a grant of Restricted Stock Units (RSUs) that vests over 4 years. I was employed in our NY office 2016-2018 and San Francisco Office 2016-present.

None of my RSUs were "delivered" until 2019, when the company went public. As such, this is the first year that RSUs are shown on my W-2 and need to be reported on my return.

Given my employment in multiple states, how much RSU income do I report on each state tax return? Do I pro-rate the amount based on the number of days employed in each location? For example, if my RSU grant is wroth $100K and I was employed for 300 days in NY and 300 days in CA, would I report $50K on each state's return?

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  • As far as I know, vesting isn't a taxable event. You didn't get any stock until 2019, so wherever you lived in 2019 is where you report all the income.
    – chepner
    Jul 3, 2020 at 19:48
  • RSU income is usually reported on your W2. Which state did your company report the income to on your W2?
    – The Photon
    Jul 3, 2020 at 19:50
  • @ThePhoton The full amount is reported for both states on my w2. In fact, it looks like they reported the full RSU amount + my salary for both states. This doesn't make sense because my salary should definitely only be reported in CA.
    – rahimftd
    Jul 3, 2020 at 22:13
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    @ThePhoton That was my thought too, but in most cases vesting means the shares are transferred to the employee and they are free to do whatever they want with them. That doesn't seem to have been the case here.
    – Craig W
    Jul 3, 2020 at 22:56
  • @CraigW That's correct. The RSUs had a time condition (vesting over 4 years) and a liquidity event condition (IPO, acquisition, etc.)
    – rahimftd
    Jul 3, 2020 at 23:10

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