If you moved between California and New York and received Restricted Stock Units (RSUs), stock options, or other deferred compensation, your income allocation may be more complex than a standard W-2 wage split. These types of earnings are often taxed based on where they were earned, not just where you lived when you received them.

Key Tax Forms for RSU & Stock Income Allocation

✅ New York (NY):

• IT-203 (Nonresident and Part-Year Resident Return) – Required for part-year residents.
• IT-203-B (Income Allocation Worksheet) – Used for regular wage allocation.
• IT-203-F (Multi-Year Allocation Form) – Required for RSUs, stock options, and deferred compensation earned in NY but paid later.
• AU-262.55 (Income Allocation Questionnaire) – May be requested during audits to verify income sources.

✅ California (CA):

• Form 540NR (Part-Year/Nonresident Return) – Required for part-year residents.
• Schedule CA (540NR) – Adjustments & Income Allocation – Used to allocate RSU and stock-based income between states.

How RSUs & Stock Options Are Taxed When Moving Between States

• RSUs & Stock Options Are Often Sourced to the State Where You Earned Them: Even if you receive them after moving, they may still be taxable in your previous state if they were granted while working there.
• California & New York Use Different Rules:
  • New York taxes RSUs based on the time you worked in the state during the vesting period.
  • California may tax RSUs even if they vest after you move, depending on prior residency and work location.
• Double Taxation Risk: You may need to claim credits for taxes paid to another state to avoid double taxation.

Common Mistakes to Avoid

🚫 Reporting RSUs as Fully Taxable in the Wrong State – Income must be allocated based on where it was earned, not just where you lived when it vested.
🚫 Overlooking IT-203-F for NY – If you worked in NY before moving and received RSUs later, IT-203-F is required.
🚫 Failing to Adjust for CA Residency Rules – California can still claim tax on RSUs from past employment, even after you move.

💡 If you’ve moved between California and New York and received RSUs or stock options, proper allocation is crucial to avoid overpaying taxes. Need help? Reach out for expert guidance!