Last reviewed: October 2026
RSU taxes after moving states are split by where you did the work, not by where you live on vest day. California and New York both sort equity pay with a workday count, so a state you left can still claim part of shares that vest long after your move. A state with no income tax takes nothing from its share, but it does not erase the old state's.
Key Takeaways
- Your old state taxes the share of each vest earned there, counted in workdays from grant date to vest date, not by address.
- Federal withholding on supplemental wages like RSU vests is a flat 22%, or 37% above $1 million, which can leave higher earners short.
- California's top bracket is 12.3%, plus 1% above $1 million, and a nonresident owes it only on California-source income.
- Before you move, ask payroll in writing how it will source vests after your move date, then set aside the old state's estimated share.
About the Author: Jeff Judge, CFP®, AEP®, ChFC®, CLU® is Managing Partner of Chesapeake Financial Planners in Forest Hill, Maryland. He has been helping families and business owners in Harford County and the Baltimore metro area navigate equity compensation and state tax questions since earning his CFP® certification in 2013, by using Chesapeake's signature process, the R.U.D.D.E.R. Method™. "A move changes the address on your driver's license; it does not change where the work behind a vest took place."
How Do RSU Taxes After Moving States Work in Each State?
A four-year RSU grant is pay for four years of work, delivered as the shares vest. States read it the same way, so each taxes the part of a vest it can trace to work done inside its borders.
California says so directly. In its equity compensation guidelines, the Franchise Tax Board states that for a nonresident, "California will tax the wage income to the extent services were performed in California from the grant date to the vesting date." The FTB's nonresident page gives the arithmetic: California workdays divided by total workdays, times your income.
New York takes the same shape for restricted stock, stock options, and stock appreciation rights. Its nonresident guidance multiplies compensation by a "New York workday fraction," over an allocation period that "may span multiple years and may include periods in which the nonresident was formerly a New York State resident." Confirm with your preparer how New York applies it to RSUs.
Picture a grant made two years before your move that vests one year after it. Roughly two thirds of that vest was earned in the old state. Moving changed only who gets the other third, and in a no-income-tax state the answer is nobody. For the wider picture, see our guide to financial planning for tech company employees.
What Does the Workday Math Look Like on One Vest?
Here is a simplified version of what I walk clients through (illustrative numbers, not a tax return). Say one tranche vests at $120,000, and between the grant date and the vest date you had 500 workdays: 330 in the old state before the move and 170 in the new state after it.
| Item | Old state | New state (no income tax) |
|---|---|---|
| Workdays, grant date to vest date | 330 of 500 | 170 of 500 |
| Share of the vest | 66% | 34% |
| Vest income sourced there | $79,200 | $40,800 |
| State income tax on that slice | Yes, under the old state's nonresident method | None |
Repeat that for every tranche. Early vests after your move are largely old-state income, and later tranches shift toward the new state as more of each window falls after the move. Any state tax benefit arrives late, and the first year's runs far smaller than a spreadsheet built around your new address suggests.
"In my experience, the address on your driver's license is the least important fact in this math. The location of the work behind the shares is the one that counts." (Jeff Judge, CFP®, AEP®, ChFC®, CLU®)
Do trips back to the old state change the count? Yes. A business trip is an old-state workday, because California's method counts the days you physically performed services in California. Three weeks of on-site meetings add up across a large grant.
Why Does Payroll Often Miss the Old State's Share?
Some employers handle a mid-grant move cleanly. Plenty don't. Watch for these patterns:
- Payroll switches withholding to the new state (or to none) the day you update your address, and stops withholding for the old state.
- The old state's share goes unwithheld, so you owe it in April with nothing set aside.
- Payroll keeps withholding for the old state on the full vest, and you file to recover part of it.
Either is fixable. The first is the expensive one, because RSU withholding is already light: the flat 22% federal rate on supplemental wages can sit below the bracket a senior engineer lands in, and wages above $200,000 for a single filer also carry the 0.9% Additional Medicare Tax. Our post on the RSU tax withholding gap covers the federal side.
A software engineer I talked with last spring moved from San Jose to Austin in March, armed with a spreadsheet of what he would save on his next three RSU vesting dates. Then his W-2 arrived with two states on it, and nobody at his company had mentioned why. Jeff Judge now tells clients in that spot to put one question to their equity or payroll team in writing before the move: "How will you source RSU income for vests after my move date?"
Can Your Old State Still Tax You After You Move?
Yes, if it concludes you did not really leave. High-tax states audit residency changes, especially for high earners who move just ahead of a big income event, and a vest schedule is one. If a state treats you as a resident on vest day, the workday split disappears: the FTB's guidelines say that when you are a California resident on the vesting date, California will tax the wage income.
In my experience, reviewers look at where your family lives, where you vote, where you kept the house, and how many days you spent in each state. Keeping the old house and the old dentist makes a second address, not a move. Keep a day-count log for the first year.
Does working remotely change which state gets the days? It can. Under New York's convenience of the employer test, the Tax Department's telecommuter guidance says days a nonresident works at home count as New York workdays only if the employee's assigned or primary work location is an established New York office. A New York tech employee who moves to Florida and keeps reporting to the same New York office may find the sourcing math barely moves.
What Should You Do Before the Moving Truck Arrives?
The useful decisions get harder to change once the shares have vested. Work through these in order:
- Lay out your vest calendar for the next two or three years beside your planned move date, and estimate the old state's fraction for each vest.
- If your move date is flexible, run the numbers both ways. Moving earlier shifts more of each future vest to the new state.
- Ask payroll in writing how vests after your move date will be sourced.
- Keep your move date, your first day working from the new state, and every trip back, because payroll data may not match your actual workdays.
- File part-year resident and nonresident returns in both states. California lists a "possible other state tax credit" for RSU wage income, and Maryland residents claim a credit for taxes paid to other states on Form 502CR.
Do stock options follow the same rules? The logic is similar and the windows differ. California sources nonstatutory option income by workdays from the grant date to the exercise date, while New York's guidance uses a grant-to-vest period. California also has its own alternative minimum tax. Our post on how incentive stock options trigger an AMT bill covers the federal mechanics.
What changes if Maryland is one of the two states? The Comptroller's instructions say that if you moved into or out of Maryland during the year and received Maryland-source income while a nonresident, you file both a Form 505 nonresident return and a Form 502 resident return. If you arrive in Harford County, Maryland taxes you as a resident, with a top state bracket of 6.5% plus a Harford County local rate of 3.06% for 2026. If you are leaving, ask your preparer in writing how Maryland treats the old-state slice of vests after the move. Our checklist for moving to Harford County covers the rest (retirees should read about moving from Maryland to a no-income-tax state).
The R.U.D.D.E.R. Method™ is Chesapeake Financial Planners' six-step planning process: Review and Recognize, Uncover and Understand, Design and Develop, Discuss and Decide, Execute and Empower, and Reassess and Refine. For a pending move, the first steps are the vest calendar and the move date, side by side.
Frequently Asked Questions
How are RSU taxes handled if I move to a state with no income tax?
You still owe your old state tax on the part of each vest earned there, measured by workdays from the grant date to the vest date, and the no-income-tax state adds nothing on top. The old state's share shrinks over time as more of each vesting window falls after your move.
Does my old state tax RSUs that vest after I leave?
Yes, if you did part of the work there between the grant date and the vest date. California says it taxes a nonresident's RSU wage income to the extent services were performed in California in that period, and New York uses a similar workday fraction for restricted stock and options.
How do states count workdays between the grant date and the vest date?
They divide days worked in the state by total days worked in the period, then apply that percentage to the vest value. California's Franchise Tax Board calls California workdays divided by total workdays one reasonable method, and New York leaves nonworking days such as weekends and holidays out of its count.
Do remote workdays for a New York employer count as New York workdays?
Yes, they can count as New York workdays. Under New York's convenience of the employer test, days a nonresident works at home count when the employee's assigned or primary work location is an established New York office. A primary office outside New York changes the answer, so confirm where your employer assigns you.
Can I get a credit if two states tax the same RSU vest?
Often yes, a credit is available for tax paid to another state on the same wages, though the rules differ by state. California lists a possible other state tax credit for RSU wage income, and Maryland residents claim a credit for taxes paid to other states on Form 502CR. Your preparer should check each state's credit limits before you file.
None of this makes a move a bad idea; future grants earned entirely in the new state carry no old-state claim. The mistake is assuming the benefit starts the day the truck pulls away. It phases in. The engineer from San Jose paid his bill and was fine; he would have preferred to plan for it in March. If you are mapping RSU taxes after moving states, sit down with your vest schedule before you sign the lease.
Ready to put a plan around your vest schedule? Jeff Judge and the Chesapeake team serve families and business owners across Harford County and the Baltimore metro. Schedule a free fit call at chesapeakefp.com.
A version of this article was originally published on Jeff Judge's LinkedIn.
Disclosures
The information provided is for educational purposes only and should not be construed as investment advice. Investment strategies should be tailored to individual circumstances, risk tolerance, and goals. Past performance doesn't guarantee future results. Consult with qualified financial professionals regarding your specific situation.
This information is not intended to be a substitute for specific individualized tax, investment or legal advice. We suggest that you discuss your specific situation with a qualified tax, legal or financial advisor.
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