Adjust Federal Tax Withholding for Equity Compensation

As part of Upstart’s ongoing commitment to providing clarity and support with your equity compensation, you have the option to choose between a 22% or 33% federal tax withholding rate for your restricted stock unit (RSU) vesting events and non-qualified stock option exercises.

By default, federal tax withholding for RSU vesting events and non-qualified stock option exercises is set at 22%. However, you may elect to increase your withholding rate to 33% if a higher rate better aligns with your personal tax strategy.

This is not tax advice. You should consult your own tax advisors to determine if an increased withholding rate is right for you.

WHY ADJUST YOUR WIthholding

Adjusting your tax withholding rate is a proactive way to ensure that you’re paying enough in taxes throughout the year in connection with your equity compensation transactions. One key reason to increase your withholding is to help avoid potential underpayment penalties when you file your federal taxes.

The income recognized from RSU vesting events or non-qualified stock option exercises often significantly impacts your compensation. While Upstart withholds taxes when RSUs vest or non-qualified options are exercised, the withholding rate is based on the IRS’s default supplemental income rate of 22%. As a result, the withholding may not fully account for the actual tax due on this income.

How to make the change

If you wish to increase your withholding to 33%, please note that any adjustments you make will apply to future vesting events or exercises. You can revisit this choice at any time.

If you would like to select the 33% federal withholding tax rate, you may do so by submitting your election here.

When to make the change

Your election will take effect within 10 calendar days. For example, if you would like for this election to be applied before a vesting on May 20, 2025, then you would have to submit this election by May 10, 2025. ​

Changing your federal tax withholding rate from 33% to 22%

In the event that you changed your federal tax withholding rate from 22% to 33% and at some point in the future you would like to change it back to 22%, you may do so by changing your previous election here.

Can i change my state withholding rate?

Unfortunately, no — we currently do not have the ability to make changes to your State Tax Withholding Rate. That said, we are actively working with our equity brokerage provider to explore options and improve support for our employees. We’ll continue to monitor the availability of this feature.

Please click here if you would like to see the applicable State Withholding Tax Rate for your state (if your state has income taxes).

Questions?

Please reach out to Stock Administration (Stock-Adminstration@upstart.com) or submit a ticket here.

You can find more information about stock administration here.