RSU taxes by state: California, New York, Washington, and Texas compared

Tax year 2026 · Last updated May 1, 2026

Federal RSU withholding is the same everywhere: 22% (or 37% above $1M YTD). State withholding is wildly different. Here is how the four biggest tech-worker states actually treat an RSU vest.

California

Top marginal rate: 12.3% (13.3% above $1M income with the mental-health surcharge).
Supplemental withholding: 10.23% on stock-option / RSU income (FTB Pub DE 44).
Result: a CA top-bracket employee under-withholds at 2.07% (12.3 − 10.23) on top of the federal gap.

New York

Top marginal rate: 10.9%.
Supplemental withholding: roughly 11.7% (NYC residents face additional city tax of up to 3.876%).
Result: state federal-gap is small, but NYC residents see the largest combined effective rate of any major US tech city.

Washington

No state income tax on wages.
Result: state withholding is zero. Federal-only shortfall applies.
Note: Washington introduced a 7% capital-gains tax in 2022, but that does not affect ordinary RSU vest income — only sales of vested shares above the long-term threshold.

Texas

No state income tax.
Same as Washington — federal-only shortfall.

Multi-state residency mid-year (very common for IPO workers who relocate around the lockup) is a separate problem. The income may be split between states based on where the work was performed. This is exactly the kind of fact pattern where a $200 CPA consultation pays for itself.

Worked example: $50,000 vest, $200,000 base salary, single filer

Federal: marginal 32% × $50k = $16,000 owed; withheld 22% × $50k = $11,000; gap $5,000. CA: marginal 12.3% × $50k = $6,150 owed; withheld 10.23% × $50k = $5,115; gap $1,035. NY (no NYC): marginal 10.9% × $50k = $5,450; withheld ~11.7% × $50k = $5,850; refund $400. WA / TX: state gap = $0.

The federal gap is by far the bigger lever. Run the calculator above with your exact state to get specific numbers.