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NSOs · Taxation
What is taxed, and when, from grant to vest to exercise to sale.
Guide Start here
How NSOs are taxed: the bargain element and everything after
The spread between the stock price and your strike at exercise is ordinary income, taxed like salary that year. Then the shares are just stock. This is the whole NSO tax picture: the spread, the payroll surtaxes, the withholding gap, your real basis, and the capital gain after.
Question
State taxes on NSOs when you change states
Move to a no-tax state and you still owe the old state on the part of the spread you earned there. The income follows the workdays, not your new address.
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