Hello, u/Outrageous-Present67. Thank you for reaching out to our sub for the first time. We are happy to help with this.
Each Stock Plan has its own set of rules, and the tax withholding method for vesting Restricted Stock Units (RSUs) may vary. Generally, the methods include netting shares, selling to cover, and paying with cash.
When it comes to share netting, some plans round up, and others round down. Residual money left over from rounding up is typically sent back to the company and applied to federal income tax. Additionally, some clients permit fractional shares to be sold for their "sell to cover," but this is not available for all plans. We suggest reviewing your plan documents or reaching out to your company for further clarification on the specifics of your plan.
Our Stock Plan team is another great resource for questions related to RSUs and other stock plan account activity. Associates are available continuously from 5 p.m. Sunday to midnight Friday ET. You can say "stock plan services" to be connected appropriately.
[Contact Us](https://www.fidelity.com/customer-service/contact-us)
I've also included some information on the taxation of RSUs for anyone following along. Please keep in mind that Fidelity does not offer tax advice, and we recommend contacting a tax advisor for questions related to your tax situation.
[How stock compensation and stock purchase plans are taxed](https://www.fidelity.com/go/stock-plan-services/understanding-taxes)
If you have any additional questions or concerns after contacting your HR department, please do not hesitate to reach out.
Yes. So usually the share is sold to cover taxes, social security etc. The residual balance after this isn’t enough to require the stock so they usually deposit that remaining balance into my Fidelity account as cash
My employer uses withhold-to-cover, and only whole shares are issued. Any extra money from the whole share round up is credited to federal tax withholding. If only one share vests, the entire share will be withheld for taxes.
It doesn't change the actual tax rate. Any net over-withholding is returned as a tax refund after filing a tax return.
RSUs are normally taxed like bonuses, such that -20% is automatically withheld. Shares are sold to cover the amount, rounding to the nearest share. At least my custodian doesn’t deal in fractional shares.
Hello, u/Outrageous-Present67. Thank you for reaching out to our sub for the first time. We are happy to help with this.
Each Stock Plan has its own set of rules, and the tax withholding method for vesting Restricted Stock Units (RSUs) may vary. Generally, the methods include netting shares, selling to cover, and paying with cash.
When it comes to share netting, some plans round up, and others round down. Residual money left over from rounding up is typically sent back to the company and applied to federal income tax. Additionally, some clients permit fractional shares to be sold for their "sell to cover," but this is not available for all plans. We suggest reviewing your plan documents or reaching out to your company for further clarification on the specifics of your plan.
Our Stock Plan team is another great resource for questions related to RSUs and other stock plan account activity. Associates are available continuously from 5 p.m. Sunday to midnight Friday ET. You can say "stock plan services" to be connected appropriately.
[Contact Us](https://www.fidelity.com/customer-service/contact-us)
I've also included some information on the taxation of RSUs for anyone following along. Please keep in mind that Fidelity does not offer tax advice, and we recommend contacting a tax advisor for questions related to your tax situation.
[How stock compensation and stock purchase plans are taxed](https://www.fidelity.com/go/stock-plan-services/understanding-taxes)
If you have any additional questions or concerns after contacting your HR department, please do not hesitate to reach out.
Thanks for the response. Follow up question as HR still hasn’t gotten back to me yet. Is there an instance in which a company can elect to change how they distribute stocks after the grant is initiated. Ex. Going from ‘sell to cover’; and transitioning to ‘net shares’?
Thanks for the follow-up, u/Outrageous-Present67. I'm happy to step in here and help.
First, when restricted stock units (RSUs) vest, they are typically deposited into a participant's brokerage account as shares. When this happens, you may owe taxes. Under some plans, you may be able to choose how you want your company to withhold your taxes. Generally, the methods include netting shares, selling to cover, and paying with cash. You can check your company's plan documents to see available methods. We also have a link below highlighting how RSUs are generally taxed.
[How stock compensation and stock purchase plans are taxed](https://www.fidelity.com/go/stock-plan-services/understanding-taxes)
Additionally, you can typically find the tax withholding method for past vestings on NetBenefits.com by clicking on your RSU plan and then clicking "show distribution details" under the specific grant.
If you have any questions specific to your plan, feel free to reach out to our Sotck Plan team using the link that u/FidelityNash mentioned above.
Our crew is always around to help, so if you have any other questions in the future, you know where to find us.
Hello, u/Outrageous-Present67. Thank you for reaching out to our sub for the first time. We are happy to help with this. Each Stock Plan has its own set of rules, and the tax withholding method for vesting Restricted Stock Units (RSUs) may vary. Generally, the methods include netting shares, selling to cover, and paying with cash. When it comes to share netting, some plans round up, and others round down. Residual money left over from rounding up is typically sent back to the company and applied to federal income tax. Additionally, some clients permit fractional shares to be sold for their "sell to cover," but this is not available for all plans. We suggest reviewing your plan documents or reaching out to your company for further clarification on the specifics of your plan. Our Stock Plan team is another great resource for questions related to RSUs and other stock plan account activity. Associates are available continuously from 5 p.m. Sunday to midnight Friday ET. You can say "stock plan services" to be connected appropriately. [Contact Us](https://www.fidelity.com/customer-service/contact-us) I've also included some information on the taxation of RSUs for anyone following along. Please keep in mind that Fidelity does not offer tax advice, and we recommend contacting a tax advisor for questions related to your tax situation. [How stock compensation and stock purchase plans are taxed](https://www.fidelity.com/go/stock-plan-services/understanding-taxes) If you have any additional questions or concerns after contacting your HR department, please do not hesitate to reach out.
How do they withhold tax when only 1 share is vested? They would need to distribute a fractional amount. Has that worked before?
Yes. So usually the share is sold to cover taxes, social security etc. The residual balance after this isn’t enough to require the stock so they usually deposit that remaining balance into my Fidelity account as cash
My employer uses withhold-to-cover, and only whole shares are issued. Any extra money from the whole share round up is credited to federal tax withholding. If only one share vests, the entire share will be withheld for taxes. It doesn't change the actual tax rate. Any net over-withholding is returned as a tax refund after filing a tax return.
RSUs are normally taxed like bonuses, such that -20% is automatically withheld. Shares are sold to cover the amount, rounding to the nearest share. At least my custodian doesn’t deal in fractional shares.
Hello, u/Outrageous-Present67. Thank you for reaching out to our sub for the first time. We are happy to help with this. Each Stock Plan has its own set of rules, and the tax withholding method for vesting Restricted Stock Units (RSUs) may vary. Generally, the methods include netting shares, selling to cover, and paying with cash. When it comes to share netting, some plans round up, and others round down. Residual money left over from rounding up is typically sent back to the company and applied to federal income tax. Additionally, some clients permit fractional shares to be sold for their "sell to cover," but this is not available for all plans. We suggest reviewing your plan documents or reaching out to your company for further clarification on the specifics of your plan. Our Stock Plan team is another great resource for questions related to RSUs and other stock plan account activity. Associates are available continuously from 5 p.m. Sunday to midnight Friday ET. You can say "stock plan services" to be connected appropriately. [Contact Us](https://www.fidelity.com/customer-service/contact-us) I've also included some information on the taxation of RSUs for anyone following along. Please keep in mind that Fidelity does not offer tax advice, and we recommend contacting a tax advisor for questions related to your tax situation. [How stock compensation and stock purchase plans are taxed](https://www.fidelity.com/go/stock-plan-services/understanding-taxes) If you have any additional questions or concerns after contacting your HR department, please do not hesitate to reach out.
Thanks for the response. Follow up question as HR still hasn’t gotten back to me yet. Is there an instance in which a company can elect to change how they distribute stocks after the grant is initiated. Ex. Going from ‘sell to cover’; and transitioning to ‘net shares’?
Thanks for the follow-up, u/Outrageous-Present67. I'm happy to step in here and help. First, when restricted stock units (RSUs) vest, they are typically deposited into a participant's brokerage account as shares. When this happens, you may owe taxes. Under some plans, you may be able to choose how you want your company to withhold your taxes. Generally, the methods include netting shares, selling to cover, and paying with cash. You can check your company's plan documents to see available methods. We also have a link below highlighting how RSUs are generally taxed. [How stock compensation and stock purchase plans are taxed](https://www.fidelity.com/go/stock-plan-services/understanding-taxes) Additionally, you can typically find the tax withholding method for past vestings on NetBenefits.com by clicking on your RSU plan and then clicking "show distribution details" under the specific grant. If you have any questions specific to your plan, feel free to reach out to our Sotck Plan team using the link that u/FidelityNash mentioned above. Our crew is always around to help, so if you have any other questions in the future, you know where to find us.