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Intel RSU Taxation

This is just a little public service announcement for my fellow Intel employees. The company started granting RSUs instead of stock options last year, and now that the first batch of RSUs have vested I'm sure a lot of people are curious how they affect your taxes.

Taxes are due upon vesting (not upon grant or sale) and the company will automatically withhold a portion of the shares to cover the taxes. The withholding appears to be at the standard federal rate for bonuses, 25%, rather than being adjusted by income and exemptions and that sort of thing.

Because the RSUs are considered ordinary income, they also withhold 7.65% for FICA. In Oregon bonuses are subject to 9% withholding (which is also the actual tax rate for nearly everyone). So the total withholding in Oregon is 25% + 7.65% + 9% = 41.65%. The company will withhold an integer number of shares, always rounding up.

Yes, nearly half the value of your RSUs is withheld to cover the taxes. Insert your own comment here about taxes being obscenely high.

You should probably sell the rest of your vested RSUs immediately because you have too much Intel exposure already, don't you?


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