RSU vested and not sold but reported as income on W2 box 14

[jacobtruman]

I have had some RSUs vest, that I did not sell, that have been included as income in box 14 of my W2. After entering everything form my 1099b and editing the cost basis to the correct values, box f on the Summary of Compensation Income From Employer Stock Transactions form has values that are several thousand dollars lower than what is reported in box 14 of my W2. Should I edit these on the Summary of Compensation Income From Employer Stock Transactions form to match my W2 (resulting in a lower Federal Tax Due amount), or leave them alone and have them not match?

[DavidD66]

If you received a stock award (e.g. Resricted Stock, or RSUs), tax is assessed on the value of the stock on the day the stock vests/ is delivered.  That amount is ordinary income, and is included in Wages on Box 1 of your W-2 for that year.  Your cost basis is also the value of the stock on the day it vests or is delivered.  The problem is, brokers don't have (or don't report) that information.  If you know the amount that was added to your income, that is your actual cost basis.  In order to keep from paying tax on the stock award twice, you have to correct your cost basis.  To do so, go to that 1099-B transaction, and on the page with the Description, Date Acquired, Date of Sale, Sales Price, and Adjusted Cost or Other Basis, click on "I'll enter additional info on my own".  On the next page, enter the "Corrected cost basis"

The shares reported on Form 1099-B should only be the shares sold to pay your tax withholding on the RSU vesting.  The amount in Box 14 (which is informational only) should also have been added to box 1 of your W-2.  You will have to allocate the value of the RSUs at vesting among the units sold to pay taxes and the units you held.

[jacobtruman]

Thank you for your quick replay. I have entered the corrected cost basis for the shares that I sold, and that all looks right. The only shares on my 1099-B are the ones that I sold - the shares sold to pay the taxes for the shares that I did not sell are not reflected on my 1099-B, only on a "Statement of Taxable Income" provided by my company. Do I need to provide that information somewhere on my tax forms?

[DawnC]

No, your 1099-B should only include information about the shares you sold.   The remaining shares that vested are already included in your W-2, so you don't need to include any other information.   Keep that information with your tax records.  When you sell the shares in the future, you may need that if the cost basis is not correct on the future 1099-B.   

[jacobtruman]

So, stock that vested in 2020 will be counted as income for 2020, even though it was not sold in 2020? Will it also be considered income in 2021 is I sell it this year?

[npierson7]

Yes, that counted as income in 2020. When you sell it, you will have gain or loss on the sale, and you'll be taxed on the gain or deduct the loss. It could be short or long term capital gain/loss, depending on the length of time you'll hold the stocks.  

[hoysala]

Should the stocks that were sold-to-cover taxes (at the time of vest) be included in schedule D at all? Because these stocks sold for taxes are not part of my 1099-B. 1099-B only includes the stocks that I sold and not the ones sold for taxes.

This would resolve my confusion. THank you,

[RobertB4444]

@hoysala  They should have been included on your 1099-B but if they were not then enter what is on the form and go from there.

[hoysala]

Thanks for the reply. I entered all the items on the 1099B form into Sch. D. These were quarterly vesting for the first year. Since there are no entries in 1099B for stocks sold for taxes and they are included in W-2, I think I do not need to add anymore entries into sch.D. Do you agree that I do not need to add anymore entries into sch.D?

[hoysala]

This was answered here: https://ttlc.intuit.com/community/taxes/discussion/re-how-to-enter-rsu-vested-stock-that-was-sold/01...

[GeorgeM777]

Yes, that's correct.  If you did not sell any of your RSUs, there is nothing to report on your tax return.  You are correct again that the amount from the shares sold to cover were already included on your W-2 and thus, there is no need to report those sales on your tax return.   Thus, there are no entries to make on Schedule D. 

@hoysala

[animaljive]

Rehashing this.  I've read it 10 times and i'm still not 100% sure here.  I have a w2 that has the RSU value included in box 14 and the total in line 1.  The 1099B that i've received from Fidelity is showing the vested stock throughout the year as a sale with a Proceeds total around $16k.  None of the stock was sold, so all of these sells are automatic to pay the taxes.

Am i correct that I do not need to enter this 1099B form at all when filling out my Taxes, since they are just the taxes that i've already effectively covered on my W2?

[GeorgeM777]

Well, not exactly.  If the shares that were sold to cover the taxes were sold at a price higher than the shares that vested with you, then you have a capital gain on the sale of the shares sold to cover.  If the shares that were sold to cover were sold at a price below the price of the shares that vested with you, then you will have a capital loss.  

You are correct in that ordinarily there is probably neither a gain nor a loss to report; however, that is not always the case.  Because the 1099-B reflects that shares were sold, go ahead and report the sale.  If the sale price is the same as the price of the stock that vested with you, the result will be neither a gain nor a loss.  

@animaljive

[animaljive]

the 1099B gives me none of this information.  Just QTY sold, proceeds, cost basis of 0, and it just reflects the GAIN as the total proceeds.  So I have to go back through each by and sell individually and check the price for that day?

[GeorgeM777]

Yes, to obtain the correct cost basis you need to independently verify the price on the day the RSUs vested.  Brokers don't know the cost basis so it is quite common for them to enter a zero cost basis on the 1099-B.  

@animaljive