RSUs and other forms of equity compensation are taxed at three key points: when they vest, when you exercise or sell your shares, and when you cash in. Tax rates depend on which of these points you’re at — and that’s where it gets complicated for tech professionals working remotely.

If you work at a private company and are awarded double-trigger RSUs, California taxes your shares when they vest according to this formula:. This is because you’re earning income from your shares at the time they’re vested and liquid, even if you’re not a California resident.

You’ll pay the same ordinary income tax rate you would on a paycheck, plus any local or state payroll taxes (like California’s State Disability Insurance) that apply to your wages. The rest of your equity compensation will be deposited into your stock account 2-3 business days after your RSU vesting date, and you’ll then have the option to immediately sell those shares for a profit or hold on to them to minimize capital gains taxes.

If you have single-trigger RSUs, and your employer is still private, the company may withhold enough shares to cover your tax bill when they vest. If not, you’ll need to make a cash payment the following April 15th. You can minimize capital gains taxes by donating long-term appreciated shares (if allowed by your company’s insider trading policy and compliance team) or by holding on to your vested RSUs for at least one year before selling.