Free tool
Double-Trigger RSU Tax Calculator
Private and pre-IPO RSUs are taxed only when both the time/service vesting condition and a liquidity event (IPO or acquisition) occur. At that second trigger, the full vested value lands as ordinary income in one year — and the default 22% withholding rarely covers it. Estimate the bill below so you know how much cash to set aside.
Your situation
Estimate only — not financial or tax advice. Consult a qualified CPA before making decisions about exercising stock options, selling equity, or other financial moves.
What hits at the second trigger
- Federal supplemental withholding (22% / 37%)
- $88,000
- Social Security (up to wage base)
- $0
- Medicare (1.45% + 0.9% surtax)
- $9,400
- State supplemental withholding
- $40,920
- Estimated net proceeds
- $213,286
Based on tax year 2026 federal brackets, FICA, and state tables. Assumes the full vested value is recognised as ordinary W-2 income at the liquidity event (IRC §83(a)).
Read the deep dive: How double-trigger RSUs get taxed
Double-trigger RSU tax FAQ
When are double-trigger RSUs taxed?
Double-trigger RSUs are NOT taxed when the time/service vesting condition is met. Tax is deferred under IRC §83(a) until BOTH the time condition AND a liquidity condition (an IPO or acquisition) are satisfied. When the liquidity trigger fires, the full vested value becomes ordinary W-2 income in that single tax year.
Why is 22% withholding not enough at a liquidity event?
Employers withhold federal tax on supplemental wages (including RSU settlements) at a flat 22% up to $1 million per calendar year, and 37% above $1 million (IRS Publication 15). A concentrated lump sum usually pushes you into a 32-37% federal marginal bracket plus state tax, so the 22% flat withholding leaves a shortfall you owe at filing.
Does this calculator include FICA and state tax?
Yes. It estimates Social Security (6.2% up to the annual wage base), Medicare (1.45% plus the 0.9% Additional Medicare Tax on high earners), and state tax for CA, NY, IL, MA, NJ, OR (with WA and TX at 0%). For other states you can enter your own marginal rate and we flag it as an estimate to verify with a CPA.
Is this a substitute for tax advice?
No. This is a free estimate based on tax-year 2025 brackets and rates. It does not account for deductions, credits, AMT interaction, or your complete situation. Consult a qualified CPA before making decisions about selling equity or other financial moves.
Want the full picture, including the lock-up-to-tax-deadline liquidity gap and financing options? Try the IPO Lock-Up Planner.