RSU Tax Calculator: Withholding Gap, Penalty & States
RSUs are taxed as ordinary income on the vesting date at your full marginal rate, plus FICA and state tax. Your employer withholds at a flat 22%, so anyone in the 32% bracket or higher ends the year short. This calculator shows the size of that shortfall and what it costs if you leave it until April.
RSU Tax Calculator
Your plan details
Fill in your plan details and press Calculate my equity value — you'll get after-tax value, the tax breakdown bar, a growth chart and a year-by-year table.
Year-by-year projection
Estimates for planning only — not financial or tax advice. Vesting RSUs are withheld at the 22% federal supplemental rate (37% above $1m), with Social Security at 6.2% to the $184,500 wage base for 2026, Medicare at 1.45% and Additional Medicare at 0.9% above $200,000. The gap figure is tax owed at filing, not withheld at vest.
Two thresholds that make the shortfall harmless
Owing tax in April is not a problem. Owing it without having paid enough during the year is, because the IRS charges interest per quarter under section 6654.
Two thresholds switch that charge off.
The $1,000 rule. If your balance after withholding comes to less than $1,000, no penalty applies, whatever your quarterly pattern looked like.
The safe harbour. Pay in the smaller of 90% of this year’s total tax or 100% of last year’s. If your prior-year adjusted gross income was above $150,000, or $75,000 filing separately, the prior-year figure rises to 110%.
| Your position | Pay in during the year |
|---|---|
| Prior-year AGI $150,000 or below | 100% of last year’s total tax |
| Prior-year AGI above $150,000 | 110% of last year’s total tax |
| Either case | Or 90% of this year’s tax, if that is lower |
| Balance under $1,000 after withholding | Nothing further needed |
The prior-year route suits RSU holders because the number is already known. If your 2025 total tax was $48,000 and your AGI cleared $150,000, paying in $52,800 across 2026 protects you regardless of how large the vest turns out to be. Anything left is simply due on 15 April, with no interest attached.
Why a December W-4 change beats a December payment
This is where people lose money they did not need to lose.
Estimated tax payments are credited on the day you make them. A payment in December does nothing for a shortfall that began in April.
Withholding works differently. The Form 2210 default treats wage withholding as paid in equal amounts across all four instalment dates, whatever month it was actually deducted. Raise your withholding late in the year through a revised Form W-4 and a quarter of it is credited back to the first instalment date. A March vest can still be repaired in November, provided you fix it through payroll rather than by sending the IRS a payment.
What the interest costs, and the one relief available
The charge is the federal short-term rate plus three percentage points, reset quarterly. It ran at 7% for the first quarter of 2026 and 6% for the second.
It accrues quarter by quarter, so paying extra in June does not undo a shortfall from April. And because it is interest rather than a penalty in the ordinary sense, reasonable cause will not get it abated.
One relief does apply. Where income arrived unevenly, which describes anyone with a single large vest, the annualised income instalment method on Schedule AI of Form 2210 lets you match required payments to when the income actually landed. The schedule takes effort to complete. On a six-figure vest it usually earns its keep.
The state you left can still tax the vest
Moving to Texas or Florida before a vest does not clear the state bill.
Most states with an income tax allocate RSU income by workdays: the portion belonging to a state equals its workdays between grant and vest, divided by total workdays over that span. California, New York, Massachusetts and New Jersey apply this most actively. California sets the formula out in Publication 1004, and excludes weekends, holidays and vacation days from the count.
A grant made in California and vesting three years later, with 600 of 1,000 workdays performed there, leaves 60% of the vest as California-source income. Your Nevada residency on the vest date does not change that.
Your resident state normally gives a credit for tax paid elsewhere, which stops genuine double taxation. That credit is worth nothing if you moved to a state with no income tax, because there is no resident liability for it to offset.
Payroll rarely reflects any of this. Withholding goes to one state and the allocation gets settled on your returns.
Pre-IPO grants settle in a single lump
Private company RSUs usually carry two conditions: time-based vesting, and a liquidity event such as an IPO or acquisition.
Meeting the first condition delivers nothing. There is no income and no tax while units time-vest at a private company, because they remain subject to a substantial risk of forfeiture. Settlement is governed by section 409A, which is why a company cannot release shares early or let you pick a date, and why violations carry a 20% additional tax.
When the liquidity event happens, every time-vested unit settles at once. Years of grants become ordinary income on a single day.
Two consequences follow. The 22% shortfall applies to the entire settled position rather than one year’s tranche, so the gap that would have been manageable annually arrives multiplied. And a post-IPO lock-up can leave you taxed on a price you had no ability to sell at. If the shares fall during the lock-up, your tax stays fixed on the higher figure.
Workday allocation also gets messy here. Because the taxable date is tied to an event that may be years after time-vesting, employees often move states more than once between grant and settlement.
Before your next vest
Also you can use Stock Option Calculator.