Hi,

I need clarification on my (non-qualified) stock option tax liability. I arrived in the US on an L-1 visa in Jan this year, however, I will leave my employment and the US before the end of the year. I will then excerise and sell my company stock options (I have 1 month to do so after termination of employment). 95% of my stock options have vested while based in Europe.

My question:
Once I have left my company and the US will I still be tax resident for withholding purposes?

Many thanks,
Michael.

Michael:

Even though you were based in Europe, the stock options are U.S.-based and therefore subject to U.S. taxation.

When the options are exercised, the appropriate taxes will be withheld, probably in excess of what you actually owe. To get the excess back, you have to file a tax return for the year in which you exercised the option.

BOTTOM LINE: You will have to file a tax return (probably Form 1040NR) to get your refund.