The RSU figure in Box 14 of your W-2 tells you how much of your total wages came from restricted stock units that vested during the year. That amount is already included in Box 1, so it isn’t adding anything to your current tax bill. Its real purpose is to record your cost basis in the shares, which you’ll need when you sell them so you don’t pay tax on the same income twice. Starting with 2026 W-2s, the IRS split the old Box 14 into Box 14a and Box 14b, and your RSU amount now appears in Box 14a.1Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3
What the RSU Figure in Box 14 Represents
Box 14 is the W-2’s catch-all field for information that doesn’t fit the standardized boxes. Employers use it for items like state disability insurance, union dues, or non-taxable housing allowances. On the 2026 form, Box 14a inherits everything the old Box 14 used to hold, and Box 14b is reserved for Treasury Tipped Occupation Codes tied to tip reporting.
The label your employer uses isn’t standardized. One company writes “RSU,” another writes “RSU VEST,” “STK INC,” or just “RS.” The wording doesn’t change the tax treatment. The dollar amount is the fair market value of the shares that vested and were delivered to you during the year, and that same amount is already inside your Box 1 total alongside salary and bonuses.
How That Amount Was Already Taxed
Under federal tax law, RSU income becomes taxable when the shares are no longer at risk of forfeiture. In practice, that’s the vesting date, when the shares land in your brokerage account.2Office of the Law Revision Counsel. 26 USC 83 – Property Transferred in Connection With Performance of Services The IRS treats the fair market value on that date as ordinary wage income.
The math is simple. If 100 shares vest at $50, you have $5,000 of ordinary income. Your employer multiplies the number of shares by the closing price on the vesting date (or the delivery date, if there’s a lag), then adds the result to Box 1 (total wages), Box 3 (Social Security wages), and Box 5 (Medicare wages). That same figure is what shows up in Box 14a. It appears twice on the same form because it’s doing two different jobs: reporting taxable income in Box 1, and preserving your cost basis in Box 14a.
Because RSU income counts as supplemental wages, your employer withholds federal income tax at a flat 22%. If your supplemental wages for the year exceed $1 million, the rate on the excess is 37%.3Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide – Section: 7. Supplemental Wages Social Security (6.2%) and Medicare (1.45%) are withheld too, with the Social Security portion capped at the first $184,500 of total wages in 2026.4Social Security Administration. What Is the Current Maximum Amount of Taxable Earnings for Social Security If your Medicare wages cross $200,000 in the year ($250,000 for joint filers), an additional 0.9% Medicare tax applies to the excess.5Internal Revenue Service. Topic No. 560, Additional Medicare Tax
Most employers handle the withholding through a “sell to cover” arrangement: a portion of the vesting shares is sold automatically, and the cash covers your tax obligations. You keep the net shares.
Why 22% Withholding Often Isn’t Enough
The flat 22% rate is an administrative convenience, not a match for your actual bracket. For 2026, the 32% bracket starts at $201,775 for single filers and $403,550 for joint filers; the 35% bracket starts at $256,225 and $512,450.6Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 If your marginal rate is 32% but only 22% was withheld on your RSU income, you owe the difference at filing.
A $100,000 vest with only $22,000 withheld can leave you short $10,000 or more, and multiple tranches compound the gap fast. Two ways to close it: submit a new W-4 to raise withholding on your regular paychecks, or make quarterly estimated payments with Form 1040-ES, due April 15, June 15, September 15, and January 15 of the following year.7Internal Revenue Service. 2026 Form 1040-ES To avoid an underpayment penalty, pay at least 90% of your current-year tax liability or 100% of last year’s total tax through withholding and estimates combined. If your prior-year adjusted gross income was over $150,000, the safe harbor rises to 110% of last year’s tax.8Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty
Using the Box 14 Amount as Your Cost Basis
This is where Box 14a earns its keep. When you sell RSU shares later, your brokerage reports the sale on Form 1099-B. Your taxable gain is the difference between the sale price and your cost basis, and for RSU shares, that basis is the fair market value on the vesting date, which is the same figure your employer included in your W-2 income.9Internal Revenue Service. Publication 551 (12/2025), Basis of Assets
The trouble is that brokerages frequently report the wrong basis. Some show zero. Others report the net amount after the sell-to-cover transaction rather than the full fair market value. If you file using that incorrect basis, you’ll pay capital gains tax on the full sale proceeds even though you already paid ordinary income tax on the vesting value. The Box 14a figure is your evidence of the correct number.
Say you received 200 shares at $75 each. You reported $15,000 of ordinary income on your W-2 that year. Two years later you sell for $90 a share, or $18,000 total. Your actual capital gain is $3,000, not $18,000. Without Box 14a setting the correct basis, you could end up taxed on the whole $18,000.
Correcting the Basis on Form 8949
When your 1099-B shows the wrong basis, you fix it on Form 8949. Enter the basis exactly as the 1099-B reports it in column (e), even though it’s wrong. In column (f), enter adjustment code B, which flags the reported basis as incorrect. In column (g), enter the adjustment needed to bring the basis up to the correct figure, which is the RSU income from your W-2 Box 14a.10Internal Revenue Service. Instructions for Form 8949
Using the example above, if the 1099-B reports a basis of $0 and the true basis is $15,000, you’d enter $0 in column (e), code B in column (f), and $15,000 as a positive adjustment in column (g). Your reported gain drops from $18,000 to $3,000. Tax software usually walks you through the entries, but it can only get the math right if you feed it the original vesting value. That’s the Box 14a number.
Keeping the Records You’ll Need Later
Hang onto your W-2 and any RSU confirmation statements from your employer’s stock plan administrator for as long as you hold the shares, plus three years after you sell. Each vesting date creates its own lot with its own cost basis. If you sell only part of your position, choosing which lots to sell affects the tax outcome, and you can only make that choice if you’ve tracked the vesting-date values separately.
What Box 14 Does Not Change on This Year’s Return
For the return covering the year the RSUs vested, the Box 14a figure is informational only. Your employer already included that income in Box 1 and already withheld federal income tax (Box 2), Social Security (Box 4), and Medicare (Box 6). You don’t enter the Box 14a amount as a separate line on your 1040. Tax software will ask you to type in Box 14 codes and amounts during W-2 entry, but doing so doesn’t add a new tax event.
Some states use other Box 14a entries to calculate state-specific deductions or credits, such as state disability insurance contributions. If your Box 14a contains both an RSU code and a state-related code, follow the software prompts for each one separately. The RSU entry feeds cost basis tracking; a state entry may generate a state tax deduction. They aren’t interchangeable.