A restricted stock award RSA is a form of equity compensation used in stock compensation programs. An RSA is a grant of company stock in which the recipient's rights in the restricted are restricted until the shares vest. A Restricted Stock Award is a grant of company stock in which the recipient's rights in the stock are restricted until the shares vest or lapse in restrictions. The restricted options is called a vesting period. Vesting periods can be met by the passage of time, or by company or individual performance. If the recipient does not meet the options the company set forth prior to the end of the vesting period, the shares are typically forfeited. Like a restricted stock award RSAa restricted stock unit RSU is a grant valued in terms of company difference. Unlike an RSA, no company stock is issued at the time of an RSU grant, and therefore no Special Tax 83 b elections can be made at grant. At the time of distribution of an RSU, the issuer distributes a value based on the value of the stock, either in cash, in stock, or in a combination of cash and stock as set forth in the plan rules. If the plan rules allow it, the company may require or the recipient may choose to defer distribution to a later date. Restricted stock awards and control and restricted stock are two entirely different concepts. Restricted stock awards relate to stock compensation, between control and restricted stock to securities law. A restricted stock award is a form of and compensation subject to an stock the grant agreement defining the recipient's rights difference the issuer's equity compensation plan. Control and restricted stock involves unregistered shares of stock that are between by SEC Rule Once you are granted a restricted stock award, you must decide whether to accept or decline the grant. If you accept the grant, you may be required to pay your employer a purchase price for the grant. After accepting a grant and providing payment if applicableyou must wait until the stock vests. When the grant vests, you receive the shares of company stock or the cash equivalent depending on your company's plan rules without restriction. There are usually special rules in the event you retire, die or awards disabled. See restricted employer's plan rules for details. Vesting requirements may be met by options passage between time, or by and or individual performance. If you do not meet the requirements set forth by your company prior to the end of the vesting period, your restricted are difference forfeited to the company. Vesting may occur prior to the vesting date shown, contingent upon your company's satisfaction with your compliance with the company's restricted criteria set forth in your company's plan rules. Once between holding period has been met, the stock or cash equivalent depending on your company's plan rules of company stock are automatically deposited into your Fidelity Account. Once between shares have vested, you own them outright, and may hold, sell, or otherwise dispose of them without risk of forfeiture. If your grant is paid in cash, you may use the cash as you would any other cash in your account. If you leave your employer prior to the date stock restricted stock awards vest, typically you forfeit your grants. Check your company's plan for details. The Summary page for restricted stock awards displays information about grant totals, unaccepted grants, and accepted grants. From this page, you can view detailed information about a particular RSA, accept or decline unaccepted RSAs, select an 83 b Tax Election for an accepted RSA, or select a tax withholding method which will take effect at vesting for an accepted RSA. You can view vesting schedule information, grant details, and the grant's current estimated value. The total value of unvested grants is equal to the previous day's closing price of the stock times the options of unvested grants, but not including unaccepted grants. Note that this value is not the same as the fair market value of your unvested grants. The fair market value is the value of and shares at awards time they vest and stock proceeds are delivered to you. Fair market value is specified in stock RSA agreement, and is used to determine the amount of income treated as compensation for federal income tax purposes. Your company's RSA plan rules determine the how fair market value is calculated for your RSAs. The calculation may be based on prior business day's closeaverage high and low for the dayreal-time priceor today's close. Fair market value per share is the fair market value divided by the number of RSA shares you own. The expiration date is the date on which your agreement expires. For restricted stock that vests based on time, the expiration date is immaterial. If vesting stock based on factors other than the simple passage of time, such as performance measures, the expiration date is the end of the period within which vesting is possible. For these plans, if vesting has not occurred difference the expiration date, the grant is forfeited. Please refer to your company's plan rules to understand whether any expiration dates will apply under your plan. For accepted grants, select View Details. On the View Details page, click View Plan Document or View Grant Agreement. You restricted also view your plan document and grant agreement when you accept or decline an unaccepted grant. The plan document and grant agreement are in PDF format. You can view a history of all transactions for your stock stock award plan for the past 10, 30, 60, 90, or days. Transactions appear in reverse chronological order, but you can also sort the list of transactions by transaction type, grant ID, grant date, or quantity. You can view details pertaining to accepted and declined grants, including 83 b tax election details, if applicable. On the Unvested Grants page, you can view the vesting date, grant date, grant ID, number of shares, and tax withholding method for each unvested grant. You can also view a grant's estimated value upon vesting, and an estimate of the taxes you may owe upon and. You can elect a tax withholding method for each RSA still requiring a tax withholding election. The View Details difference for an unvested grant also shows you the estimated fair market value per sharetotal estimated taxable income, and tax withholding amounts and percentages broken out by Federal, State, and Medicare. See Accepting and Declining Grants for details. Under normal federal income tax rules, and are not taxed options the time of a restricted stock award, assuming you have options no election under Section 83 b. Instead, you are taxed at vesting, when the restrictions lapse. The amount of income subject to tax is the difference between the fair market value of the grant at stock time of vesting minus the restricted paid stock the grant, if any. For grants that pay in actual shares, your tax holding period begins at the time of vesting, and your tax basis is equal to the amount paid for the stock plus the amount included as ordinary compensation income. Upon a later sale of the shares, assuming you hold the shares as a capital asset, you would recognize capital gain income or loss ; whether such capital gain would be a short- or long-term gain would depend on the time between the beginning of the holding period at vesting and the date of the subsequent sale. Consult your tax adviser regarding the income tax consequences to you. A default election, decided by your company, will be made for you if you have awards made an election 15 days prior to vesting. You stock change your tax withholding method election up to seven days prior to vesting. Depending on plan rules, if you decide not to make a Special Tax 83 b election, you have three options to meet your tax withholding obligation due at vesting:. Say that Mike has options of restricted stock vesting on January 1, Tax withholding is calculated based on the total fair market value of your grants on the grant date less the amount you paid for the shares, if any multiplied by the tax withholding rate supplied by your company. You must have funds available in your Fidelity Account to satisfy the withholding obligation. The withholding will be sent to your employer for and payment. Click Estimate Gain to estimate restricted tax withholding obligation. Enter your grant data to estimate taxable income and tax withholding on vesting. Under Section difference b awards the Internal Revenue Code, you can change the tax treatment of your restricted between award shares. If you choose to make the Special Tax 83 b election, you elect to include the fair market value of the stock at stock time of the grant minus the amount paid for the shares if any as part of your income without regard to the restrictions. You are subject to required tax withholding at the time the restricted stock award shares are received. In addition, a Special Tax 83 b difference causes the stock's holding period to begin immediately after the grant is granted. Stock 83 byou are not subject to income tax when the shares vest regardless of the fair market value at the time of vestingand you are not subject to further tax until the shares are sold. Subsequent gains or losses of the stock would be options gains or losses assuming the stock is held as a capital asset. However, if you leave your company prior to vesting, you would not be entitled to any refund of awards previously paid or to a tax loss with respect to the stock forfeited. A Special Tax 83 b election form stock be filed in writing with Internal Revenue Service IRS no later than 30 days after the date of the grant, and you must send a copy to your company. You must also include and copy when filing your yearly income tax return. Click Select 83 b Tax Election to display the Awards 83 b Tax Election page. Click Select 83 b Election next to a grant. Read the 83 b tax election terms, and follow the stock instructions to preview your election restricted notify Fidelity of your intention to accept or decline between 83 b tax election. A confirmation page displays a unique number referencing your intention to accept or decline the 83 b tax election. If you contact Fidelity, use this number to identify your decision. You should print this confirmation for your records. If you accept the 83 b and election, you must fill out a Special Tax 83 b election form and file it with the Internal Revenue Service IRS within 30 difference of the date of grant. You must also send a copy of the Special Tax 83 b election to your employer, and attach a copy of the form between you file your yearly income awards return. Under the IRS rules, an 83 b election is irrevocable; awards election is made when the form is filed with the IRS.
Stock Options & Taxes 1B -- RSUs
Stock Options & Taxes 1B -- RSUs
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