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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10355
Experience:  30 years of corporate, litigation and international law
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My company granted me restricted shares of company stock which

Resolved Question:

My company granted me restricted shares of company stock which will vest in March 2012. I understand that the value of the stock is considered as income in the year the shares vest. When are the taxes actually due on this money? The reason I am asking is does the company have the option of withholding this over the pay periods remaining in the year or do they have to do an accelerated withholding cycle? Also do IRS regulations allow me to simply pay a lump sum to the company to cover my taxes from the vesting of restricted shares?

Thanks

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Submitted: 5 years ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 5 years ago.

You will have to pay the withholding at the time the stock vests. Although the tax is not due until April 15, 2013 when you file your tax return you have to pay withholding as though you received cash wages. Some plans allow you to reduce the number of shares you receive to cover the withholding obligation.

This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

Customer: replied 5 years ago.
Thanks for this. Not sure I completely understand. Let's say that I owe $4000 of additional taxes when the stock vests on March 26th , 2012. Are you saying that my company has to take $4000 from me immediately when the stock vests?
Expert:  Richard - Bizlaw replied 5 years ago.

Technically yes because the day the stock vests is like them giving you a check for $4,000. You can start putting money aside now or your company can take the amount needed out of your check over a period of time. If the withholding is going to be $1,000 you could start having that taken out of your check now to deal with it.

 

This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

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