23 ms·
California makes it very expensive to stick around since you pay a lot of income tax if you sell. Of course some will stay but a low 7 figure windfall pre-tax w
by randomacct3847 8y ago
California makes it very expensive to stick around since you pay a lot of income tax if you sell. Of course some will stay but a low 7 figure windfall pre-tax will not get you much house, especially if you need a bigger house to start a family, and many will be tempted to not pay a state income tax by moving out of state.
- toast0 8y agoDepending on what form your equity takes, California may still tax you if you leave. For ISOs, it's relatively simple, if you're a resident at the time of the Federal taxable event, it's a California event. For RSUs and NSOs, it's California taxable for the portion of vesting that is California sourced: the time where you were a California resident, or working in California. (Caveat: the rules are vague, you're required to use a reasonable method of apportionment and work days is documented as a reasonable method)
- randomacct3847 8y agoYes, mostly relevant for earlier employees of these companies that were awarded options that they’ve exercised but have not sold their shares (the taxable event)