Yes, this is simply to eliminate an unexpected payment to the IRS and possibly state at tax time. They are still your vested stock that was sold after the vesting date.
- 28 remaining shares: it will not be double taxing. You will be allowed to use the full fair market value on the vesting date as the cost basis when you sell these shares. The tax will be only on the gain at that time or a loss would reduce your income should that be the result on the sales date.
- It is a normal practice for employers to help you out by selling a few shares to cover your federal tax and report it to you as federal (and possibly state) withholding on your W-2.
If this took place in 2024 it will happen on that W-2 and 2024 tax return, if it happened in 2023, it will be reported in 2023.
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