Restricted stock vs RSUs vs stock options

Companies use the same words loosely. The differences show up in when you own shares and when you are taxed.

Restricted stock award

You own actual shares at grant, subject to forfeiture. Taxed at vesting unless you file an 83(b) election.

RSU

A promise of shares. No 83(b) available. Taxed as ordinary income when shares are delivered.

Stock option

The right to buy. Nothing happens at vesting; tax attaches at exercise (NSO) or sale (qualifying ISO). Highest upside, highest complexity.

This article is educational and not tax, legal, or financial advice. Talk to a CPA or tax advisor about your specific situation.

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