You participate in both an RSU plan and an employee stock purchase plan. RSU vests hit your W-2, you bought ESPP shares, and you are unsure how discount income, disqualifying dispositions, and RSU vest wages combine before filing.
Start here
What you need before using this
- with all boxes when issued.
- Each confirmation with .
- Form 3922 for purchases in the year.
- purchase confirmation and disposition records if you sold.
- Broker for any or sales.
ESPP plan designs vary. Form 3922 and your plan documents control reporting — not generic examples.
Why this happens
Many public tech employers offer and together. Each plan has its own tax timing rules under IRS Publication 525.
wages appear when restricted shares and deliver — usually one wage event per tranche.
tax depends on qualifying vs disqualifying disposition. A sale within the holding periods is often a disqualifying disposition with on the discount portion reported as wages.
Some employers report disqualifying disposition income on a later after the sale, not on purchase date — vests may hit earlier in the year.
Form 3922 reports transfer dates and prices to you and the IRS — it is not the same as confirmations.
Box 1 wages include both and components when employers report them as wages.
FICA applies to each wage event when it is reported — and wage portions can each incur Social Security tax until the wage base is reached.
401(k) deferrals generally come from salary, not gross — purchases are funded from after-tax payroll deductions.
on vests uses supplemental or aggregate rules; disqualifying income may on a later paycheck when the sale processes.
Selling shares produces above basis. Selling shares after a disqualifying disposition may split (already on ) from additional on price change after purchase.
Qualifying dispositions may produce less or no ordinary wage income — plan rules and holding periods control treatment.
Estimated tax and W-4 planning should include combined and wage spikes, not alone.
TurboTax and other software import once — you manually split mental tracking using confirmations and Form 3922.
State tax follows state wage reporting on for both income types in most cases.
is less common on standard and wage paths than on exercises — but high wage stacks still matter for bracket planning.
What to check
- Box 1 vs sum of confirmations.
- Form 3922 boxes for purchase price and market price on grant or purchase dates per form instructions.
- Whether sale was qualifying or disqualifying before estimating extra wages.
- for sales — basis and holding period boxes.
- Pay stub lines for each event type if employer labels vs .
- FICA YTD after multiple equity wage events.
- gap on combined equity wages plus salary.
- Separate lot tracking for vs shares in brokerage.
Treating ESPP purchase as tax-free because paycheck went down
What to check in your documents
- all boxes.
- All confirmations for the year.
- Form 3922 for each purchase.
- sale confirmations and .
- Employer stock plan summary plan description tax section.
RSU vest in Q2 and ESPP disqualifying sale in Q4
Illustration only, not your tax situation.
Questions people ask
- Do RSU and ESPP both go on W-2?
- wages almost always increase wages. may add wage income on disqualifying dispositions or per employer reporting — Form 3922 helps document purchase details.
- Are RSU and ESPP taxed twice if I sell both?
- reports wage income at () or on certain sales. Later sales tax gain above basis — not the same dollars if basis is correct. See are taxed twice for the parallel.
- Which comes first for bracket stacking?
- All wage income counts in the calendar year reported on . Timing within the year affects cash flow and , not the annual bracket total.
- Form 3922 vs RSU vest confirmation?
- Form 3922 is for purchases. confirmations document at . Keep both for filing.
- ESPP calculator vs RSU calculator?
- Use tax calculator for wage estimates. Use tax calculator for purchase and disposition wage components. Run both for a combined year view.
- FICA on RSU and ESPP same year?
- Both wage events can incur FICA until you reach the Social Security wage base. Medicare continues on all covered wages.
- Can I use ESPP discount to pay RSU tax?
- Cash flow planning only — tax events are separate. purchases do not automatically fund .
- Qualifying ESPP and RSU vest same year?
- Qualifying dispositions may avoid some that disqualifying sales create. wages still apply at delivery.
- TurboTax with RSU and ESPP?
- Import , enter sales with correct basis, and use Form 3922 data for fields per software interview.
- Estimated tax with both plans?
- If combined falls short of marginal tax, quarterly estimated payments or W-4 changes may be needed. See estimated tax payments guide.
When to get help from a tax pro
- wages do not reconcile to plus records.
- Multiple lots and vests sold in one brokerage sweep.
- International tax treaty or multi-country payroll with both plans.
- Private company with unusual valuation.
Related calculators
- RSU Tax Calculator
Model federal and state taxes on your RSU vest, compare withholding to estimated tax, and see what you may keep.
- Annual RSU Income Estimator
Total your expected RSU ordinary income for the year — a starting point before running detailed tax estimates.
- ESPP Tax Calculator
Model ESPP tax basics: purchase discount, holding periods, and what may show up as wages vs capital gain.
- RSU FICA Wage Base Calculator
Model FICA on an RSU vest using official wage base and payroll rates — especially when salary already consumed part of the Social Security cap.
Related pages
- ESPP Tax Guide
ESPP tax splits between discount income (often wages) and post-purchase capital gain depending on how long you hold shares after purchase.
- Form 3922 for ESPP Shares
Form 3922 reports ESPP share transfers after disposition — use it with purchase confirmations and W-2 to reconcile discount wages and capital gain.
- How RSUs Are Taxed
RSUs are usually taxed as wages when they vest, not when the grant is signed. This guide walks through the timeline in plain terms.
- RSU and Bonus in the Same Year
Multiple supplemental wage events in one year can push you into higher marginal brackets — flat withholding on each event may still leave a year-end gap.
- Equity Compensation Tax Documents
How equity compensation shows up on W-2, 1099-B, Form 3921, and plan confirmations — and how to reconcile them before filing.
Sources and notes
Primary tax claims on this page are supported by the official and secondary sources below. Broker and software links describe reporting mechanics — confirm rules against IRS or state guidance.
RSU vest wages and ESPP disposition wage income stacking on W-2.
- IRS Publication 525 — Taxable and Nontaxable Income
Internal Revenue Service · Official
Covers compensation income from stock-based pay, including restricted property under section 83.
- About Form 3922 — Transfer of Stock Acquired Through an ESPP
Internal Revenue Service · Official
Employer reporting of ESPP share transfers after certain dispositions.
- Equity Compensation — RSU taxation at vest and on sale
Charles Schwab (Workplace Financial Services) · Brokerage explainer
Plain-language explainer: RSU value at vest on W-2, FICA, withholding may not cover full tax, separate capital gains on sale.
For learning, not filing
VestingTax.com is not a CPA firm or tax preparer. Grants, employers, and states all differ. Use the cited IRS and state sources above, your own documents, and a qualified tax professional before you make decisions from this guide.