What to do if your stock price drops after vesting
You owe tax on the vest-date value even if the shares are now worth far less. Here are the moves that still help.
The mismatch
Ordinary income was locked at the vest-date price. A later decline creates a capital loss, which can only offset $3,000 of ordinary income per year — it does not undo the wage income.
Harvest the loss
Selling crystallises a capital loss you can use against other gains now and carry forward indefinitely. Watch the 30-day wash sale window around your next vest.
Cover the bill
If the withholding gap is now unfunded, raise W-4 withholding immediately or make an estimated payment to reach a safe harbour before penalties accrue.
Educational content, not tax advice. Your outcome depends on your grant documents, income and state. Equity Tax Engine models your actual position — join the waitlist.