RSU refresh grant tax: how annual grants stack on your original award

Employers grant refresh RSUs to retain employees after performance reviews, promotions, or market adjustments. Each grant is a separate legal award with its own vest schedule, but tax law treats every delivery date the same: FMV at vest is compensation.

Refresh grants often start vesting immediately or on the next quarterly cycle, while your original grant may still be on its cliff-plus-quarterly path. Two grants can produce overlapping vest dates in the same month.

Tax software and mental models sometimes assume one RSU line on the W-2. In practice, your employer may aggregate all vest wages into Box 1 without separating grants. You need grant-level records for planning even if the W-2 is one number.

Supplemental wage withholding applies per vest event, not per grant lifetime. A refresh vest in March and an original-grant vest in March each run through supplemental payroll. Two 22% withholdings on two large events still may not cover your combined marginal rate.

Refresh grants at promotion sometimes cliff again on a shorter schedule (for example six months). That creates a second cliff feeling even for tenured employees.

Refresh size relative to original grant varies by level and company policy. A $50,000 refresh vesting quarterly adds the same tax mechanics as a $50,000 slice of a larger new-hire grant.

Stock price on each refresh vest date sets wage income independently. A refresh granted when the stock was $80 still taxes at FMV on the actual vest date, which might be $120 or $60.

Sell-to-cover on refresh vests works identically: full vest FMV is wages; shares sold for withholding produce a small 1099-B line later.

Performance-based refresh grants that fail to meet metrics may never vest — no tax until delivery. Time-based refresh vests on schedule like standard RSUs.

Refresh grants after a job change at the same company (internal transfer) still vest through the same employer W-2. Refresh after joining from outside is a new grant with its own schedule.

Multiple refresh grants in one review cycle (retention plus promotion) can mean two new schedules starting the same quarter. Model combined vest FMV, not each grant in isolation.

State income tax follows wage sourcing rules for each vest date. A refresh vest after a move may involve multi-state questions covered in moving-state guides.

Refresh grants do not reset your capital gain holding period on shares from earlier vests. Each lot keeps its own vest date for later sales.

Annual RSU income estimators help when you have three or more active grants. Enter each vest tranche or total expected vest value for the year.

• ✓Separate grant IDs and vest calendars in the equity portal.
• ✓Which refresh tranches vest this calendar year vs next year.
• ✓Combined vest FMV forecast vs salary for bracket planning.
• ✓Supplemental withholding rate on each vest confirmation.
• ✓Whether promotion refresh has its own cliff date.
• ✓Sell-to-cover share count on refresh vests vs original grant vests.
• ✓W-2 Box 1 trend after first refresh vest — gap vs expectations.
• ✓Bonus or ISO exercise scheduled in the same quarter as a large refresh vest.
• ✓401(k) and HSA deferrals — vest wages count toward compensation limits.

• ✓Refresh grant agreement and vest schedule table.
• ✓Each vest confirmation PDF (original and refresh).
• ✓Pay stubs showing supplemental wage lines.
• ✓Equity portal forecast export if available.
• ✓W-2 after year-end — compare to sum of vest confirmations.

• ✓Refresh plus large ISO exercise or ESPP purchase in one year.
• ✓Refresh vest near a multi-state move.
• ✓Performance refresh with partial vest or clawback language.
• ✓Total equity comp above supplemental wage withholding thresholds.