What happens to my unvested stock options and RSUs when I move back to Europe?
Short answer: Unvested equity is usually taxed proportionately by both the US and your new European home country. The US taxes the portion earned while working in the US, while your home country taxes the full amount but typically grants a credit for the US portion. You will need to track 'US work days' to ensure correct withholding.
Written and reviewed by Anthony Walsh, Selanis. Last reviewed 2026-10-06.
Why it works this way
The IRS views RSU and option income as compensation for services. If you worked in the US for part of the vesting period, that portion is 'US-source income' and remains taxable by the US even after you leave. Your employer is required to continue US withholding on that portion, even if you are now a non-resident.
Most European countries (France, Germany, UK, etc.) tax equity at the time of vest or exercise if you are a resident then. They will tax 100% of the value but, under the treaty, will allow you to deduct the US tax paid on the US-source portion. This 'sourcing' calculation is the most common cause of filing errors and delayed refunds.
Stock options (ISOs or NQSOs) add a layer of complexity. If you move to a country that taxes options at grant or exercise rather than sale, you might face a liquidity squeeze—owing tax before you can sell the shares. Additionally, the favorable US tax treatment of ISOs is rarely recognized by European tax authorities.
The expensive mistake: Assuming the 'US work day' calculation is the employer's job alone
While large tech companies try to track this, they often get it wrong, especially if you move mid-month or have significant business travel. If your W-2 or 1040-NR doesn't accurately reflect your US-source vs. foreign-source split, you will overpay tax in one country and face an audit in the other.
What to do
- Document every US work day during the vest period — Keep a calendar of your work days in the US vs. Europe for every equity grant that is still vesting. This is your evidence for the tax return.
- Notify your HR and Payroll departments early — Ensure they have your new European address and are prepared to handle multi-jurisdiction withholding on your future vest dates.
- Model the 'tax at exercise' for options — If you have NQSOs, check if your home country taxes the 'spread' at exercise as ordinary income, which can reach 45-50% in Europe.