How to Read Your RSU W-2: Boxes, Codes, and the Withholding Gap

To read your RSU W-2, start with Box 1, which bundles vesting income with salary — there is no dedicated RSU line in the main wage boxes. Box 14 shows the RSU dollar amount as an informational label that is already counted in Box 1. Boxes 2, 4, and 6 record the taxes withheld, with federal income tax often withheld at the flat 22% supplemental rate — usually less than the marginal rate a tech employee actually owes.

If your W-2 looks bigger than you expected this year, RSUs are almost certainly why. This guide walks through every box that matters when you have restricted stock units, shows where the vesting income hides, and explains the withholding gap that turns a "fully withheld" vest into a surprise balance due in April.

Where to Start When You Read Your RSU W-2

The core confusion is simple: your Box 1 wages combine your salary and your RSU vesting income into one number, so there's no labeled "RSU line" in the primary wage boxes. When RSUs vest, the fair market value of the shares is included in your gross income as wages (IRS Publication 525), exactly like a cash bonus.

There are three regions of the W-2 to focus on when you have RSUs:

• Box 1 — total wages, including vested RSU value.
• Box 2 — federal income tax withheld (including the sell-to-cover taxes from your vests).
• Boxes 4 and 6 — Social Security and Medicare tax withheld.

Get comfortable with those, and the rest of the form follows. For the bigger picture of how RSU income is taxed across its whole lifecycle, our complete guide to how RSUs are taxed is the place to start.

Box-by-Box RSU W-2 Walkthrough

Here's what each relevant box reports when you have vested RSUs.

Box 1 — Wages, Tips, Other Compensation

Box 1 is your total taxable wages, and it includes the full fair market value of every RSU share that vested during the year, added on the vest date (IRS Publication 525). It is combined with your salary into a single figure — there is no separate RSU line.

Worked example: a $180,000 salary plus $150,000 of RSUs that vested during the year produces $330,000 in Box 1. The $150,000 isn't broken out anywhere in the main wage boxes; it's simply baked into that total.

Box 2 — Federal Income Tax Withheld

Box 2 reports all the federal income tax withheld during the year, including the tax funded by sell-to-cover at each vest. RSU vesting is a supplemental wage, and the IRS sets a flat federal supplemental withholding rate:

"The withholding rate on supplemental wages is 22% ... If the supplemental wages paid to the employee during the calendar year exceed $1 million, the excess is subject to withholding at 37%."

— IRS Publication 15 (Circular E), Supplemental Wages

Worked example: a $150,000 vest withheld at the 22% supplemental rate puts roughly $33,000 of federal tax into Box 2 for the RSU portion alone. For the full mechanics of how shares are sold to fund this, see our guide to RSU sell-to-cover.

The chart below shows how that flat 22% line sits below the effective rate a higher earner actually owes.

The takeaway: the 22% withholding bar sits well below the effective-rate bar once you're in the 32–37% federal brackets — and that gap is the balance you'll owe at filing. Map it to your own bracket with our RSU tax rate guide.

Boxes 4 and 6 — Social Security and Medicare

Box 4 reports Social Security tax withheld (6.2%) and Box 6 reports Medicare tax withheld (1.45%, plus the 0.9% Additional Medicare Tax on wages over $200,000 for a single filer). Per the IRS W-2 and W-3 instructions, Social Security applies only up to the annual wage base.

There's a quiet break here for high earners: once your salary alone exceeds the Social Security wage base, your RSU vesting income carries no additional Social Security tax — only Medicare. It doesn't reduce your income-tax bill, but it does mean Box 4 won't keep climbing with every vest once you've capped out.

Box 14 — The RSU Label

Box 14 is the "Other" box where employers report informational items, and it's where the RSU dollar amount usually appears as a label — often tagged "RSU," "STOCK," or similar. Per the IRS W-2 instructions, Box 14 is informational; the amount shown there is already included in Box 1.

Box 12 Code V — Not for RSUs

If you see Code V in Box 12, it reports income from exercising non-qualified stock options (NSOs) — not RSU vesting (IRS W-2 instructions). RSU income does not get a Box 12 Code V entry. If you only have RSUs and you see Code V, double-check with payroll; you may also hold NSOs, which are a different instrument with their own tax treatment.

The Withholding Gap — Why Box 2 Is Rarely Enough

The 22% federal supplemental rate in Box 2 is almost never enough for a tech employee, because most land in the 32%, 35%, or 37% marginal bracket — so Box 2 under-collects by 10–15 percentage points on every dollar of RSU income.

Worked example: a $150,000 vest withheld at 22% puts $33,000 in Box 2, but at a 35% marginal rate the actual federal tax on that income is about $52,500 — a $19,500 federal shortfall before any state tax. State withholding can widen the gap further: California supplements at 10.23% and New York at 11.70%, often below the true state marginal rate.

The chart shows how much of a $100,000 vest different states take, and how the supplemental withholding can fall short of it. To cover the gap, you can increase your Form W-4 withholding or make quarterly estimated payments (IRS Publication 505) — the same discipline we cover in why 22% withholding is rarely enough and estimated taxes on RSU income.

Common W-2 Mistakes RSU Recipients Make

A handful of errors account for most RSU tax-season pain:

1. Adding the Box 14 amount to Box 1. It's already included — adding it double-counts your income.
2. Ignoring the withholding gap. Assuming sell-to-cover "handled it" and skipping estimated payments can trigger an underpayment penalty.
3. Using a $0 cost basis from Form 1099-B. When you sell vested shares, brokers sometimes report a $0 basis; the correct basis is the vest-date fair market value already taxed as wages. Fix it on Form 8949 or you'll pay tax twice — the same trap that surprises filers and shrinks refunds, as covered in how RSUs affect your tax refund.
4. Confusing Box 12 Code V with RSUs. Code V is for NSOs, not RSU vesting.

The cost-basis mistake is worth a concrete number. Say 1,000 RSU shares vested at a $150 fair market value — $150,000 of Box 1 wages, already taxed. You later sell those shares for $155,000. Your real gain is just $5,000 (the $5/share of post-vest appreciation). But if your 1099-B reports a $0 cost basis and you file it unchanged, you'd report a $155,000 gain and pay capital-gains tax on $150,000 that was already taxed as wages — a five-figure overpayment on a single sale. The fix is to set the basis to the vest-date FMV on Form 8949.

What if RSU income is missing or wrong on the W-2? It happens, especially after a payroll-system change or a mid-year job switch. Compare your vest pay stubs to Box 1 and Box 14. If they don't reconcile, ask payroll to investigate and, if needed, issue a corrected W-2c — don't simply file the figure you think is right, because the IRS matches your return against the W-2 your employer submitted.

How to Read Your RSU W-2 to Verify It Is Correct

Once you know the boxes, the last step is to read your RSU W-2 against your own records and confirm every figure ties out. You can reconcile it in four steps:

1. Sum your vests. Pull your final pay stub of the year and total the fair market value of every RSU vest event.
2. Match Box 14. That total should match the RSU figure labeled in Box 14.
3. Check Box 1. Salary plus your RSU total should equal Box 1.
4. Check Box 2. Confirm the federal tax withheld lines up with the sell-to-cover amounts across all your vests.

If the numbers don't reconcile, contact payroll early — ideally by the start of March — so a corrected W-2c can be issued before the filing deadline. Once your W-2 is right, our guide to how to file equity comp taxes shows where the rest of the forms fit. For how this income threads through the rest of your return, see how equity compensation affects your tax return and the state income tax guide, with state specifics in California and New York.

Frequently Asked Questions

What box on the W-2 shows RSU income? RSU vesting income is included in Box 1 (wages), combined with your salary. Box 14 may show the RSU dollar amount separately as an informational label, but that amount is already part of Box 1.

Does the Box 14 RSU amount get added to Box 1? No. The Box 14 figure is already included in Box 1; adding it again would double-count your income.

Why is my W-2 higher than my salary? Because Box 1 reflects both your salary and the fair market value of every RSU that vested during the year, all merged into one wage figure.

How do I know if my RSU taxes were withheld correctly? Add up the sell-to-cover amounts from all your vest-event pay stubs and compare to Box 2. If that total is less than your marginal rate times your RSU income, you have a gap to cover with estimated payments.

What is Box 12 Code V on my W-2? Code V reports income from exercising non-qualified stock options (NSOs), not RSU vesting. If you only have RSUs, you should not see Code V.

Do I need to pay estimated taxes because of RSUs? If the 22% withholding leaves you short of your actual liability, you should make quarterly estimated payments to avoid an underpayment penalty.

Next Steps

Before you file, model the withholding gap so the April number isn't a surprise. Run your salary, vest value, and state through the calculator to see what Box 2 leaves uncovered.