No tax is due on a double-trigger RSU until both triggers are met, because until then the units can still be forfeited. Units that finish their service period simply wait for the liquidity event. Double-trigger is a term from company equity plans, not the tax code.
Once both triggers are met, Social Security and Medicare tax is due. Income tax follows when the shares are delivered, on their value that day. That value is taxed as wages, at 2026 federal rates of 10% to 37%. To stay exempt from Section 409A, the shares are generally delivered by March 15 of the year after both triggers are met. That deadline, the short-term deferral rule, assumes a calendar-year employer and employee.
If the liquidity event comes years into your grant, several years of units can be taxed in one year. A lockup after the IPO does not delay that tax, even though you cannot sell the shares yet. An 83(b) election cannot move the tax earlier either. An RSU is a promise of future shares, and Section 83 does not count a promise as property you received.
Sources
- 26 C.F.R. § 1.409A-1, Definitions and covered plans
- 26 C.F.R. § 31.3121(v)(2)-1, Treatment of amounts deferred under certain nonqualified deferred compensation plans
- 26 U.S.C. § 83, Property transferred in connection with performance of services
- IRS, Rev. Proc. 2025-32 (2026 inflation adjustments)
Reviewed and updated September 2026. General information, not advice for your situation.