TL;DR:

• If you spend 2 years of a 4-year grant in California, CA can tax about 50% of that grant even if the rest vests in Texas.
• You're not taxed twice on the same dollar, but you can owe tax to two states on the same vest and then use credits.
• New grants issued after you move usually belong 100% to your new state.

The great escape that isn't

Classic story:

• You start at a Bay Area company
• Stock-heavy comp, lots of RSUs
• 10–13% state tax
• Company goes "We're fully remote now."

So you move:

• California → Texas, Florida, Washington, whatever
• No state income tax
• In your head you just gave yourself a massive raise

You assume:

"Cool, all my future vests are state-tax free now."

Then tax season hits. Your old state sends you a nice little letter.

How states see your RSUs

High-tax states (California, New York, New Jersey, etc.) don't care where you live on vest day. They care where you earned the grant.

For a 4-year grant, their logic is basically:

"You worked here for X% of the vesting period. We tax X% of the income from this grant."

So if:

• You were in California for 2 of the 4 years
• You moved to Texas for the last 2
• The grant vests evenly over 4 years

California says:

"We get 50% of that grant's income."

Doesn't matter that you live in Texas now. From their point of view, half of that equity was earned while you were working in California.

A concrete example

Say you get a $400K RSU grant that vests over 4 years:

• Years 1–2: You live and work in California
• Years 3–4: You move to Texas, fully remote
• Vesting is even across the 4 years

Over the 4 years, the total income from that grant is $400K.

California looks at that and says:

• You were in CA for 2 of 4 years = 50%
• They tax $200K of that grant's income

Texas doesn't have state income tax, so they're not adding anything on top. But California is still very much in the picture.

Your "I'm saving state tax on all my vests" story just turned into:

• Saving tax on half of that particular grant
• Paying CA on the other half for a few years after you've already left

New grants you get after you move are a different story.

Not all states chase you the same way

Roughly:

Aggressive about trailing allocation:

• California
• New York
• New Jersey

No state income tax to worry about at all:

• Texas
• Florida
• Washington
• Nevada
• Wyoming

If you're leaving a high-tax state for a no-tax state, assume the high-tax state will try to hang onto its slice of your older grants.

If you're moving from one income-tax state to another (say CA → CO), both may want to claim a piece and then you clean it up with credits.

The "double tax" fear

People get really stuck on this, so let's be clear.

You are not supposed to pay full tax twice on the same dollar of income.

What can happen is:

• Old state claims part of the vest
• New state also taxes your entire income as your new home state
• You then claim a credit on one return for taxes paid to the other

On paper, it should work out. In reality:

• The cash flow can suck
• The paperwork is annoying
• Screwing up the sourcing can leave money on the table

This is one of those cases where a local CPA who understands multi-state sourcing easily earns their fee.

Practical steps if you're moving

Do yourself a favor and keep everything neat.

Before you move

• Figure out what % of each big grant was earned in the old state
• Roughly estimate how much of future vests that old state will claim
• Adjust your "I'm saving X in tax by moving" expectations
• Note grant dates vs your planned move date

When you move

• Update your address with your employer right away
• Save proof of your move date (lease, utility bills, etc.)
• Make sure payroll updates your state withholding where possible

At tax time

• File a non-resident return in the old state showing only the portion they're entitled to
• File a resident return in the new state
• Claim credits so you're not double-paying
• Keep records of what you paid where

For new grants

• Make sure the grant date is clearly after you moved
• Save offer letters and grant docs showing that
• In your own tracking (spreadsheet or app), tag grants as:
  • "Old-state grants"
  • "New-state grants"

How I think about this in Tarqeq

When I look at relocating, I care about:

• How much of my existing equity is "tainted" by the old state
• What my real state tax savings are, not the fantasy version
• Which future vests are clean vs partially taxed by the old state

In Tarqeq, I mark:

• Grants as "pre-move" or "post-move"
• The percentage of each pre-move grant I expect the old state to claim
• A rough state tax rate for each state

That's enough to answer:

"If I move this year, how much state tax am I actually saving over the next few years?"

It's never as high as the napkin math you do the first time you think "I should move to Texas."

Rough out your multi-state tax exposure →

References

• California FTB: Nonresidents and Part-Year Residents — CA rules for sourcing income
• NY Tax Bulletin: Allocation of Wage Income — NY nonresident allocation rules
• Tax Foundation: State Income Tax Rates — States with no income tax
• IRS Publication 505 — Tax withholding and estimated tax for multi-state filers