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RSUs are considered supplemental income, and as such, the income you receive from them is subject to withholding taxes. The IRS requires a federal withholding rate of 22% for supplemental income up to $1 million, and 37% for income exceeding that amount.
How do you avoid double taxation on RSUs? You can avoid double taxation on RSUs by selling them immediately after they vest. If the fair market value of the stocks is the same on the day they vest and the day you sell, you will not owe capital gains.
What is the purpose of Form IL-4644? This form is to report the gains from only the sale or exchange of securities of an employer that you received in a distribution from a qualified employee pension, profit-sharing, or stock bonus plan.
If you move to a new state during your vesting period, you will owe taxes based on a ratio that considers two factors: Total number of workdays from the grant date to the vest date. Total number of days worked in each state.
Youll only be taxed by the state where you have residency at the time of the sale. Ordinary income isnt always so straightforward. Instead, you may owe taxes in more than one state, the one where you currently have residence and in California. Knowing if you do depends on the Allocation Ratio.
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Pursuant to these provisions, restricted stock units (RSU) and deferred compensation plans (DCP) must generally be considered compensation for purposes of the IITA. As such, the RSU and DCP pay is taxable in Illinois if paid in this State under IITA Section 302(a).

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