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Message
Stock award dividend income taxes
Posted on 11/2/25 at 4:08 pm
Posted on 11/2/25 at 4:08 pm
I am receiving a stock award from my company. Vesting time is 3 years. Reading the FAQ it appears that the dividends will be treated as income and my paycheck taxed accordingly, even though I will not be receiving dividend payments prior to vesting. I also read that dripping the dividends won’t change this.
Have any of you encountered this before? If so, is there anything I can do to limit or offset my income tax exposure on these dividend payments?
My plan at 3 years is to sell the stock completely and invest the money elsewhere.
Thanks!
Have any of you encountered this before? If so, is there anything I can do to limit or offset my income tax exposure on these dividend payments?
My plan at 3 years is to sell the stock completely and invest the money elsewhere.
Thanks!
2
Posted on 11/2/25 at 4:48 pm to weagle1999
The dividends are in fact treated as income and you'll owe taxes on it once they issue to you, at least that's what I've experienced.
The stock will be treated as long/short term gain or loss based on price and date you sell versus price and date stock was issued to you.
Really not much you can do about the dividend issuance. It's considered income and a good problem to have. Max out your 401K? If not, increase to offset as much of the dividends as you can. Same for wife about max out 401K.
The stock will be treated as long/short term gain or loss based on price and date you sell versus price and date stock was issued to you.
Really not much you can do about the dividend issuance. It's considered income and a good problem to have. Max out your 401K? If not, increase to offset as much of the dividends as you can. Same for wife about max out 401K.
Posted on 11/2/25 at 5:24 pm to Victor R Franko
Thanks. I was considering bumping up my pre-tax 401k to try and offset. My HSA is already maxed.
Posted on 11/2/25 at 7:17 pm to weagle1999
Are these issued to you already or are they RSUs?
In my experience, RSUs that haven’t vested yet are not owned by you and there is no tax implication until they vest and are recognized as ordinary income. Dividends are irrelevant until they vest.
In my experience, RSUs that haven’t vested yet are not owned by you and there is no tax implication until they vest and are recognized as ordinary income. Dividends are irrelevant until they vest.
Posted on 11/2/25 at 8:32 pm to lynxcat
quote:
Are these issued to you already or are they RSUs?
They haven’t been issued yet. I’m not sure if they are restricted I will need to read the paperwork
This post was edited on 11/2/25 at 8:32 pm
Posted on 11/3/25 at 11:01 am to lynxcat
quote:
my experience, RSUs that haven’t vested yet are not owned by you and there is no tax implication until they vest and are recognized as ordinary income. Dividends are irrelevant until they vest.
This is my experience. Hard to owe taxes on something that isn't yours or that you aren't receiving income on.
Posted on 11/3/25 at 4:17 pm to weagle1999
quote:
They haven’t been issued yet. I’m not sure if they are restricted I will need to read the paperwork
I have the same type of RSUs. The first round I received will mature later this month at the 3 year mark. I get quarterly dividends deposited to the account my paycheck goes into but doesn’t show on my pay stub. Got an email stating that when the stock matures later this month the stock will be converted to cash and either paid out directly to me or put in an account for me to transfer or cash out.
This post was edited on 11/3/25 at 4:18 pm
Posted on 11/3/25 at 4:59 pm to JonTheTigerFan
Okay thanks. I am receiving restricted stock, will be reading the details tonight
Were you able to drip the dividends? That would be my preference.
Were you able to drip the dividends? That would be my preference.
This post was edited on 11/3/25 at 8:27 pm
Posted on 11/4/25 at 6:01 am to weagle1999
I didn’t see an option to reinvest the dividends. I will look more into it. I just hope my stock goes up before they become unrestricted in a few weeks 
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