New York Supplemental Tax Regulations for Amazon RSUs
New York State Department of Taxation and Finance applies statutory supplemental withholding. For New York City residents, combined state and local marginal rates can exceed 14.77%, causing a severe gap between statutory sell-to-cover and true combined liability.
New York Safe Harbor & Underpayment Penalties
Requires quarterly IT-2105 filings when tax withheld is over $300 below true tax.
Employer Stock Plan Specifics: Morgan Stanley at Work (Shareworks) / Fidelity
Amazon equity packages are heavily backloaded into years 3 and 4 (40% each year). In year 3, your total W-2 income can leap into the 37% marginal bracket, while Morgan Stanley only withholds 22% federally. Without quarterly estimated payments or selling additional shares, Amazonians face a $15,000–$40,000 tax shock in April.
When vesting at Amazon, Morgan Stanley at Work (Shareworks) / Fidelity calculates automatic sell-to-cover withholding using New York's statutory supplemental rate of 11.70% combined with the federal supplemental rate (22% on up to $1M). Because top earners in New York reach marginal brackets exceeding these rates, you will face an incremental shortfall on April 15.
Localized CPA & Advisory Referral
Advisor Guidance: Consult a New York Tri-State CPA specializing in NYS Form IT-2105 and NYC local tax equity withholding safe harbors.