US person abroad
US persons abroad: foreign payroll does not cancel the 22% US hole.
Reviewed August 21, 2026. About. Not tax advice.
If you are a US citizen or resident alien, RSU vests are US wage income even when you live in London, Singapore, or Hong Kong. A US parent often still withholds 22% federal on the vest. That is the same hole as a California IC, minus a US state if you truly have no US residency. Foreign tax paid on the same vest may generate a foreign tax credit — or a mess of sourcing and totalization. This desk does not compute FTC, FEIE, or housing exclusion. It will still show the US 22% gap if you enter the dollars.
What to enter here
US-dollar vest and US W-2 equivalent. Pick a no-state or “other” state if you have no US wage-tax state. Then send the slip plus the foreign payroll statement to someone who files both countries.
FAQ
- Does the foreign earned income exclusion wipe RSU tax?
- Usually not in the way people hope. RSUs often fail the exclusion tests or get allocated across years. Do not zero the vest on a blog post. Take the grant paperwork to a cross-border CPA.
- My UK employer already ran PAYE.
- Then you may be over-withheld in the UK and under-withheld in the US, or the reverse. Two systems, two returns. This product is the US supplemental-wage slip only.
Sources
- IRS Publication 15 (Circular E) — Supplemental wage withholding: 22% up to $1 million, 37% above.
- IRS tax year 2026 inflation adjustments (Rev. Proc. 2025-32) — 2026 federal brackets and standard deduction.
- IRS estimated taxes — 1040-ES installment dates and underpayment penalty.