Nvidia RSU Vesting & Tax Withholding Guide
Due to Nvidia’s multi-year stock appreciation and split-adjusted share counts, unvested initial grants and annual focal refreshers routinely generate large quarterly vest valuations. Under IRC § 3402(g), your brokerage withholds only 22% federal tax on the first $1,000,000 of supplemental wages each calendar year, before jumping to 37% on every dollar above $1,000,000. That leaves the first $1,000,000 of NVDA vests underwithheld by up to $150,000 federally.
Vesting Schedule, Release Dates & Multi-Year Stacking
Vesting Cadence: 4-year initial grant (25% Year 1 cliff, then 6.25% quarterly); annual focal grants vest 6.25% quarterly with no cliff
Release Schedule: Typically the 3rd Wednesday of March, June, September, and December.
When a volatile high-growth stock like NVDA vests at an elevated FMV in March and June, you owe ordinary income tax locked in at that exact day’s share price—even if the stock subsequently pulls back 20%–30% later in the year. Failing to liquidate the incremental shares needed to cover your 15% tax shortfall on the vest date exposes you to the risk of owing taxes on peak share prices with depreciated shares.
Brokerage Administration & Withholding Elections (E*TRADE by Morgan Stanley / Charles Schwab)
Default Withholding Policy: Statutory withholding defaults to 22% federal supplemental rate on the first $1,000,000 of cumulative annual supplemental wages, jumping automatically to 37% above $1,000,000.
How to Adjust Your Withholding Rate: Nvidia employees should review their supplemental withholding elections in E*TRADE / Schwab or via Nvidia Payroll prior to the March, June, September, and December vest dates. Even if your annual vests exceed $1,000,000 and trigger the mandatory 37% tier on the excess, the initial $1,000,000 tranche still creates an ~13%–15% federal gap (and a ~3.1% California gap above the 10.23% flat rate) unless you make quarterly estimated payments.
Form W-2 Box 14 & Form 1099-B Cost Basis Reconciliation
High-earning Nvidia employees must pay special attention to two items on their tax return: (1) The 0.9% Additional Medicare Tax (Form 8959), as employers only start withholding 0.9% once your individual W-2 wages cross $200,000 (ignoring spouse wages), and (2) California’s 1% Mental Health Services Tax on taxable income above $1,000,000, which is never covered by California’s flat 10.23% supplemental withholding.