What happens to your RSUs when you leave
Two different things happen at once: the units that have not vested disappear, and the shares you already own become ordinary stock. Only one of those is a tax event, and it is not the one people worry about.
Updated November 4, 2026 Sources and methodology
Unvested units are forfeited, not taxed
Vesting is a condition of employment, so units still on the vesting schedule at your last day are cancelled. There is no tax on them because you never received income: nothing was ever included in your wages, so there is nothing to unwind. The forfeiture can still hurt, but it does not appear on a return.
The exceptions live in your plan and grant agreement, and they are worth reading before you sign anything:
- Retirement provisions. Many public-company plans treat a qualified retirement as continued vesting.
- Involuntary termination. Plans often accelerate part of the award when the company ends the relationship without cause.
- Change of control. Single or double trigger acceleration if the company is acquired.
- Cause and clawback. Termination for cause, or a breach of confidentiality and non-solicit terms, can forfeit unvested units and in some plans claw back vested shares.
Vested shares were already taxed
Every share you hold has already produced ordinary income on its vest date, at the closing price that day. That amount is in box 1 of your W-2 for the year of vesting and it was subject to Social Security and Medicare, not only income tax. Leaving does not change it, delay it, or recharacterise it.
What leaving does change is your basis. It stays at the vest-date value, and the holding period started at vest. If you sell after more than a year, the gain above that value is long-term. If you sell sooner, it is short-term and taxed at ordinary rates. Use the RSU tax calculator to see the tax a given vest created, and remember that the sale is a separate event.
The final paycheck and the 22% problem
Your last vest usually lands on a payroll that also pays out salary, vacation and any bonus. All of that is supplemental wage income for withholding purposes, and the flat rate is 22% up to $1 million in the calendar year. If your marginal rate is higher, the shortfall survives your departure: it is settled on your return, not by your former employer.
Estimate the gap before December so you can adjust a W-4 elsewhere, or make a quarterly payment. The withholding calculator returns the exact shortfall for your bracket.
Which state taxes the income
The default rule is the state where you worked on the vest date. If you moved, or if you worked remotely for an office in another state, the answer can be less obvious:
- Allocated states. Some states require you to allocate the income over the service period that earned it, so a portion can follow you across state lines.
- Double taxation. If two states tax the same vest, the state of residence usually grants a credit for the tax paid to the other. Claim it, or you pay twice.
- No-income-tax states. Texas, Florida, Washington and others do not tax the vest, but Washington applies a separate tax on high earners and California applies SDI to wages, which equity income can trigger.
What to do before your last day
- Download every grant agreement and the plan document, not only the award summary in the broker portal.
- Record your vest-date prices. Without them you cannot compute basis, and broker portals close access after a period.
- Check the exercise window if you also hold options: usually 90 days after termination, and unexercised options expire worthless.
- Confirm the withholding on the final vest before the payroll is closed. After you leave, correcting it is your problem.
- Decide whether to sell or hold. Holding concentrates both your job risk and your portfolio in the same company, which is the argument for selling on a schedule.
Frequently asked
Do I lose my RSUs if I resign?
Unvested units are usually forfeited when you leave, because vesting is a condition of employment. Some plans accelerate part of the award on retirement, involuntary termination without cause, or a change of control, so read the grant agreement and the plan document rather than assuming the worst or the best.
Do shares that already vested get taxed differently after I leave?
No. The tax happened at vest: that value is ordinary wage income and it is already in your W-2 for the year of vesting, with Social Security and Medicare applied. Leaving changes nothing about that event. Only a later sale creates a new taxable event, measured from the vest-date price as your basis.
Which state taxes my RSUs if I move?
Generally the state where you worked on the vest date, not where you live when you sell. Some states allocate the income over the service period instead of taxing it all at vest, which matters if you transferred between offices. New York and California are the usual sources of double-taxation surprises, and both offer credit mechanisms when another state also taxes the same income.
Can my employer claw back shares after I leave?
A plan can include clawback or forfeiture provisions for cause, for breach of a restrictive covenant, or under an exchange-listed company policy adopted under SEC Rule 10D-1. Those provisions apply to vested shares in some plans, not only unvested ones.
Sources. Section 83 treatment of substantially nonvested property: IRC section 83. Supplemental wage withholding: IRS Publication 15 (2026). Clawback policies: SEC Rule 10D-1. State allocation rules vary by statute; these are general patterns, not advice for a specific state.