How are RSUS taxed when you move states?

With RSU, you’re taxed on the date the shares are released to you and they become your property. Again, the income from RSU is taxable in the state of California to the extent that you worked there from the grant date to the vest date…

Are ISOS transferable?

An ISO cannot be transferred to another person. The period from the date of the grant to the exercise date may be no longer than 10 years.

How are stock options taxed in California?

Generally, you recognize taxable wage income upon the exercise of a nonstatutory stock option. The difference between the fair market value of the stock on the exercise date and the option price is the taxable wage income. For more information, refer to California Schedule S, Other State Tax Credit.

How do I report ISO exercise on tax return?

If compensation income is included on the W-2, simply report wages from box 1 on line 1 of your Form 1040. On Schedule D and IRS Form 8949, report the gross proceeds from the sale of ISO shares. This figure is shown on Form 1099-B received from your broker. You will also show the cost basis for the shares.

Does California Tax ISO exercise?

When you exercise ISOs, you may owe California taxes if you trigger the AMT (alternative minimum tax). When you exercise NSOs, you pay California income tax on the spread between your strike price and the current 409A valuation (or Fair Market Value).

How is RSU taxed in California?

RSUs, including so-called double-trigger RSUs, are taxed as ordinary income from compensation when they vest. At exercise, California taxes the portion of the income corresponding to the amount of time you lived in California between the grant date and exercise date.

Do ISOs expire?

Theoretically, ISOs expire 10 years from the date you’re granted them. However, your company might enforce a post-termination exercise (PTE) period that gives you a shorter amount of time to exercise options after you leave the company.

Can you issue ISOs to non employees?

Only employees can receive ISOs, whereas NSOs may be granted to any service providers (e.g., employees, directors, consultants, and advisors).

Do stocks affect EDD?

For California Residents, all taxable wages resulting from stock option transactions are to be reported to the Employment Development Department (EDD) as PIT wages regardless of where the services that generated the wages were performed.

Do I pay tax when I exercise ISO?

The tax benefit of ISOs is that you may not have to pay ordinary income tax when you exercise them. Instead, you may only have to pay the lower capital gains tax if you exercise them within—and hold them for—a certain amount of time.

Does exercising stock options count as income?

Workers can buy shares at a pre-determined price at a future date, regardless of the price of the stock when the options are exercised. With NSOs, you pay ordinary income taxes when you exercise the options, and capital gains taxes when you sell the shares.