For Intuit employees in San Diego
Your Intuit RSUs Withhold at 22%. Your Marginal Rate Almost Certainly Is Not 22%.
The flat supplemental rate is 22% for 2026. A single filer's marginal rate reaches 24% at $105,700 of taxable income and 32% at $201,775. Every $100,000 that vests leaves a gap you will meet in April, and the ESPP, which withholds nothing at all, sits on top of it.
The withholding gap
Why Your Intuit RSU Vest Withholds Too Little
The number on your vest statement is a statutory default, not a calculation about you.
When RSUs vest, the value is supplemental wages, and employers may withhold federal tax at a flat rate rather than running it through your W-4. For 2026 that rate is 22%, restated by the IRS in Publication 15 each year. Above $1,000,000 of cumulative supplemental wages in a calendar year the rate on the excess becomes 37% and is mandatory, no election, no W-4, no employer discretion.
Essentially every large-cap payroll system defaults to the 22%. It is not a judgement about your income; it is the same number applied to everyone below the million-dollar line.
Here is where it stops working. Under the 2026 rate schedules, a single filer's marginal rate reaches 24% at $105,700 of taxable income and 32% at $201,775. Married filing jointly, 24% begins at $211,400 and 32% at $403,550. Anyone at Intuit receiving meaningful equity is very likely above the first of those and quite possibly above the second.
The shortfall is arithmetic. At a 24% marginal rate, each $100,000 of vest is withheld $2,000 light. At 32% it is $10,000 light. At 35%, $13,000. Those gaps do not announce themselves, the vest looks handled, the shares appear, and nothing on the paystub suggests a balance is accumulating.
One thing worth asking your payroll directly, because no public filing answers it: whether Intuit permits an election to withhold at a higher supplemental rate. Some employers do. If yours does, the fix is a form. If not, the fix is estimated payments or a W-4 adjustment, and the difference matters for how you plan the year.
Three things people get wrong
Three Costly Misreadings of Equity Compensation
“"Tax was withheld when my RSUs vested, so that is handled."”
22% was withheld, because that is the flat supplemental rate for 2026. A single filer's marginal rate reaches 24% at $105,700 of taxable income and 32% at $201,775. At 32%, every $100,000 of vest is withheld $10,000 light.
“"Nothing taxable happens on my ESPP until I sell the shares."”
Income arises on a disposition, but the withholding problem starts earlier: no employer withholding is required on ESPP compensation income at all. It reaches your W-2 with nothing withheld against it, on top of the 22% gap on your RSUs.
“"I held the ESPP shares a year after buying them, so the sale is qualifying."”
There are two clocks and the later one controls: two years from the offering date and one year from the purchase date. For shares bought 15 December from a 16 September offering period, the binding date is the following September, nine months after the one-year mark. An automatic reset on 16 December moves it again.
The ESPP
How the Intuit ESPP Lookback Actually Works
Six-month offering periods, a 15% discount applied to the lower of two prices, and one clause most people have never read.
Intuit's offering periods run six months, beginning 16 September and 16 March. Each contains two three-month purchase periods, so shares are bought on four dates a year. Enrolment windows are 15 to 31 August and 15 to the end of February.
The purchase price is 85% of the lesser of the fair market value on the offering date or the fair market value on the purchase date. That is the lookback, and it is the feature that makes an ESPP worth more than a 15% discount on its own: if the stock rose across the six months, you buy at 85% of the older, lower price.
You can contribute up to 15% of compensation by payroll deduction, in whole percentage points, where compensation means base salary, commissions and cash bonuses. You may decrease your rate once per purchase period or stop entirely, but you cannot increase it in the middle of an offering period, which makes the enrolment window the moment that matters.
Now the clause. If the stock is lower on 16 December or 16 June, the start of the second purchase period, than it was on the offering date, the plan automatically withdraws you from that offering period and re-enrols you in a new three-month offering period at the lower price. On price alone this is good for you: your lookback resets downward.
But the grant date resets with it. The two-year holding clock for a qualifying disposition runs from the offering date, so an automatic reset restarts it. If you have been tracking a date to sell on, a reset moves it, and nothing about the transaction announces that it happened. This is the single most consequential detail in the plan document, and it is the one almost nobody has read.
| Your marginal rate | Begins at taxable income (single) | Begins at taxable income (MFJ) | Federal shortfall per $100,000 |
|---|---|---|---|
| 22% | $50,400 | $100,800 | None, withholding matches |
| 24% | $105,700 | $211,400 | $2,000 |
| 32% | $201,775 | $403,550 | $10,000 |
| 35% | $256,225 | $512,450 | $13,000 |
| 37% | $640,600 | $768,700 | $15,000 |
Three Decisions That Compound Over a Career
What you do at each vest, what you do after each ESPP purchase, and how much of your net worth ends up riding on one ticker. Individually each looks like a small administrative choice. Made the same way for fifteen years, they are most of the difference between a large balance and a diversified one, and the tax treatment of each is decided before you get a chance to think about it.
Two clocks
The Intuit ESPP Has Two Holding Periods, and the Later One Wins
One year from purchase is the one people remember. Two years from the offering date is usually the one that binds.
A qualifying disposition requires both: no sale within two years of the grant, the offering date, and none within one year of the transfer of the shares to you. Both must be satisfied, so the later date controls. Intuit's own plan document calls this the Notice Period and defines it in exactly those terms.
Work it through on real dates. Shares bought on the 15 December purchase date of an offering period that began 16 September 2026: the one-year-from-purchase date is 16 December 2027, and the two-year-from-offering date is 17 September 2028. The later of the two is September 2028, nine months after the date most people would have marked. For Intuit's calendar the two-year test is almost always the binding one.
And if the automatic reset fired on 16 December, the offering date moved, so the two-year date moves with it. Recompute rather than assume.
What turns on it is the character of the income. On a qualifying disposition, the ordinary income is the lesser of 15% of the offering-date value or your total gain, and everything beyond that is long-term capital gain. On a disqualifying disposition, the ordinary income is the full bargain element at purchase, purchase-date value less what you paid, with no cap and no reference to the offering-date price. On a stock that rose during the period, that is substantially more ordinary income.
Your Form 3922 carries every input for both calculations: grant date, purchase date, the fair market value on each, and the price you paid. It arrives for the year the shares transferred, and it is worth keeping rather than filing unread.
The $25,000 limit
The Intuit ESPP Limit Is Measured at a Price You Might Not Expect
It is $25,000 of stock at the grant-date price, not $25,000 of spending, and not the discounted price.
Federal law caps ESPP purchases at $25,000 of fair market value per calendar year, and the measurement is taken at 100% of the value on the offering date. Not at the 85% price you actually pay, and not at the price on the day you buy. Intuit's proxy states this directly.
Two consequences follow, and both cut in the participant's favour once understood. The first is that your actual cash outlay tops out lower than $25,000, roughly $21,250, being 85% of the limit, assuming a single offering-date price governs the year.
The second is the one people get backwards. Because the limit is measured at the offering-date price, a stock that rises during the period does not consume more of your allowance. The share count you are entitled to was fixed at grant. Most participants assume a rising stock eats into the limit faster; it does not.
One number here that will not move: the $25,000 has been $25,000 since 1964 and is not indexed to inflation. Every other figure on this page changes; that one has not in sixty years.
The stack
California and Medicare Sit On Top of the Intuit Federal Gap
Three separate shortfalls, none of them visible on a paystub, all landing in the same April.
California withholds supplemental wages at its own flat rate. For the category covering stock options and bonuses, which is where RSU vest income is generally withheld, that rate is 10.23%, and it has been unchanged since November 2009. Other supplemental payments such as commissions, overtime and severance withhold at 6.6%.
A California marginal rate at these income levels runs from 9.3% upward, reaching 13.3% at the top once the state's 1% Mental Health Services Tax applies above $1,000,000 of taxable income. So the flat 10.23% covers some people and undershoots others, independently of whatever the federal side is doing.
Then the Additional Medicare Tax, at 0.9% on wages, which your employer must withhold once it has paid you more than $200,000 in a year. The mismatch is that your employer cannot see your filing status or your spouse's income. Two spouses each earning $180,000 have nothing withheld, neither employer crossed $200,000, while their joint wages of $360,000 sit well above the $250,000 married-filing-jointly threshold. It is not a large number on its own, but it is another one arriving unannounced.
There is a fourth, and it is the quietest. ESPP compensation income carries no employer withholding at all. Not a reduced rate, none. It appears on your W-2 with nothing withheld against it, which is a reliable source of April surprises for people who assumed the payroll system had handled it.
The fix
Two Levers That Close the Gap Before April
One removes the penalty risk entirely. The other still works in December, which most people do not realise.
The first is the prior-year safe harbour. Pay in 110% of the tax shown on your prior-year return, 110% rather than 100% because your adjusted gross income was above $150,000, and you are protected from an underpayment penalty regardless of how large this year's equity income turns out to be. That last part is what makes it valuable when vest values are unpredictable: you do not need to forecast the year correctly, only to cover a number you already know.
The second is a timing asymmetry worth knowing about. Wage withholding is treated as paid evenly across the year no matter when it actually happened, while estimated payments are credited to the quarter you make them in. So if you discover in October that you are short, increasing withholding on your remaining paychecks can cure a shortfall from earlier in the year. A fourth-quarter estimated payment cannot do the same thing.
That asymmetry is the single most useful thing on this page for anyone who has already had a large vest and is reading this late in the year. The fix is usually a W-4 change, not a cheque.
None of this is a reason to avoid equity compensation or to sell at vest. It is a reason to know the number before it arrives, which takes an afternoon once and then a short check each year.
The honest part
What Is Not Public About the Intuit Plans
The plan document is public and unusually detailed. The administration around it is not.
Whether Intuit payroll allows you to elect a higher supplemental withholding rate on RSU vest. Not in any filing. Ask payroll. It changes which of the two fixes above applies to you.
The actual purchase dates as administered. The plan sets period ends of 15 March, 15 June, 15 September and 15 December with the purchase falling on the last business day, but Intuit publishes no calendar. Your Form 3922 carries the dates that were actually used.
Whether a maximum share count per offering period is in force. The plan document sets a default of 1,000 shares unless the Committee provides otherwise, and the 2022 proxy says the Committee has not exercised that authority. Those two statements are in tension and cannot be reconciled from public documents, so we are not going to state one.
The administrative layer generally, which broker, what sale restrictions apply, whether same-day sale is available, and how insider-trading blackouts overlay the purchase dates. None of it is filed.
Share reserve figures on this page are as of 31 July 2025, the most recent annual report available when this was written. The plan had 1,657,666 shares remaining against a recent run rate of roughly 300,000 to 400,000 a year, which is four to five years of headroom, worth watching for a share-increase proposal in a future proxy, but not something that affects a current participant.
Everything above resolves from your plan portal, your Form 3922, or a question to payroll. Bring those and the general becomes specific quickly.
Questions people ask before booking
Is BAS Financial affiliated with Intuit?
No. BAS Financial is not affiliated with, endorsed by, or sponsored by Intuit Inc. Company names are used only to describe the employer benefit structures discussed. This is independent financial education, not a company benefit or a company-sponsored resource.
Why is only 22% withheld when my RSUs vest?
Because 22% is the flat rate employers may apply to supplemental wages, restated by the IRS for 2026 in Publication 15. It is a statutory default applied to everyone below $1,000,000 of cumulative supplemental wages in a year, not a calculation about your income. Above $1,000,000 the rate on the excess is 37% and becomes mandatory.
How much am I actually short?
It is the difference between your marginal rate and 22%, applied to the vest. Each $100,000 vesting is short $2,000 at a 24% marginal rate, $10,000 at 32%, and $13,000 at 35%. California adds a second gap where its flat 10.23% falls below your state marginal rate, and unwithheld ESPP income stacks on top of both. A senior employee with several hundred thousand vesting in a year can be tens of thousands short across the three.
What is the automatic reset in the ESPP, and why does it matter?
If Intuit stock is lower on 16 December or 16 June, the start of the second purchase period, than it was on the offering date, you are automatically withdrawn from that offering period and re-enrolled in a new three-month one at the lower price. Good for your purchase price. But the grant date resets too, and the two-year qualifying-disposition clock runs from the grant date, so your holding date moves. Nothing about the transaction flags it.
When can I sell ESPP shares without a disqualifying disposition?
After the later of two years from the offering date and one year from the purchase date. For Intuit's September and March offering dates, the two-year test is almost always the binding one, often around nine months after the date people have in mind. Your Form 3922 carries the grant date, purchase date and both fair market values, which is everything you need to work it out.
How much can I actually put through the ESPP?
Up to 15% of compensation by payroll deduction, subject to the federal limit of $25,000 of stock per calendar year measured at 100% of the offering-date price. Because the measurement uses the grant-date price rather than the discounted price, your actual cash outlay tops out around $21,250. And because it uses the offering-date price rather than the purchase-date price, a rising stock does not consume your allowance faster, which is the opposite of what most people assume.
What is the simplest way to avoid an underpayment penalty?
Pay in 110% of the tax shown on your prior-year return. The 110% figure applies because your prior-year adjusted gross income was above $150,000. It protects you regardless of how large this year's equity income turns out to be, which is exactly what makes it workable when vest values are unpredictable.
I have already had a big vest and it is October. Is it too late?
Usually not. Wage withholding is treated as paid evenly across the whole year regardless of when it happened, while estimated payments are credited to the quarter you make them. So increasing withholding on your remaining paychecks can cure a shortfall from earlier in the year in a way a fourth-quarter estimated payment cannot. For most people in that position the fix is a W-4 change rather than a cheque.
Work out the number before April does it for you
Bring your most recent vest statement, your Form 3922 if you have bought through the ESPP, and last year's return. Between them we can work out what your marginal rate actually is, how far 22% is falling short across the vests you have coming, whether the prior-year safe harbour is the cleaner fix than estimating, and, if you are reading this late in the year, whether a W-4 change still closes the gap.
Book a consultationA 30-minute call. No document gathering beforehand, and no obligation afterwards.
What these figures assume
Every number on this page depends on the assumptions below. Change one and the result changes.
Withholding rates, 2026 brackets, and the shortfall
- Federal flat supplemental withholding rate, 22% for supplemental wages up to $1,000,000 cumulative in a calendar year; 37% mandatory on the excess above $1,000,000. IRS Publication 15 (Circular E) for use in 2026, "What's New": "The withholding rate on supplemental wages remains 22% (37% if supplemental wages paid to an employee during the calendar year exceed $1 million)." High confidence.
- Note on sourcing: Treas. Reg. §31.3402(g)-1(a)(7)(iii)(F) still literally reads "28 percent", a stale post-TCJA regulation that has not been conformed. The operative figure comes from its cross-reference to the statutory rate, which the IRS restates annually in Publication 15. Pub 15 is the correct citation, not the raw regulation text.
- The $1,000,000 supplemental threshold is fixed by statute and is not indexed. The 22% and 37% rates are restated each year and must be re-verified every January.
- 2026 federal rate schedules, IRS Rev. Proc. 2025-32, §3.01. Single: 22% from $50,400; 24% from $105,700; 32% from $201,775; 35% from $256,225; 37% above $640,600. Married filing jointly: 22% from $100,800; 24% from $211,400; 32% from $403,550; 35% from $512,450; 37% above $768,700. All figures are taxable income and all are inflation-indexed annually.
- The shortfall column is (marginal rate − 22%) × $100,000: $2,000 at 24%, $10,000 at 32%, $13,000 at 35%, $15,000 at 37%.
- Method caveat, stated plainly: the flat 22% applies to the gross supplemental payment, while a marginal rate applies to taxable income including that payment. The table approximates the shortfall on incremental RSU dollars for someone already above the crossover. It is not a substitute for a projection on an actual return.
- NOT PUBLISHED, gross-income equivalents of the crossover points. A rough conversion is possible using only the standard deduction, but it ignores every other adjustment and would be presented as more precise than it is. Only the taxable-income thresholds above are citable, and they are what appear on this page. The figures and the reasoning are recorded in this page's source comment for whoever edits it next.
- 2026 standard deduction, $32,200 married filing jointly, $24,150 head of household, $16,100 single. Rev. Proc. 2025-32.
- Additional Medicare Tax, 0.9% on wages, employee only with no employer match. Employer withholding is triggered by wages from that employer exceeding $200,000 in a calendar year. Liability thresholds are $250,000 married filing jointly, $200,000 single and head of household, $125,000 married filing separately. Not indexed; unchanged since 2013. The IRS is explicit that an employer "does not consider the employee's filing status or whether the employee's spouse has other wages."
- California supplemental withholding, 10.23% for the category covering stock options and bonuses; 6.6% for other supplemental payments including commissions, overtime, severance and vacation payouts. EDD DE 231PS, Rev. 8 (8-19), effective for payments on or after 1 November 2009. Note the publication names the category "stock options and bonuses" and does not use the term RSU; RSU vest income is generally withheld within that category as a matter of payroll practice.
- California's top marginal rate reaches 13.3% once the 1% Mental Health Services Tax applies to taxable income above $1,000,000 (Rev. & Tax. Code §17043).
- Estimated tax safe harbours, 90% of the current-year tax, or 100% of the prior-year tax, substituting 110% where prior-year adjusted gross income exceeded $150,000 ($75,000 if married filing separately). No penalty where the balance due after withholding and refundable credits is under $1,000. 2026 Form 1040-ES; IRC §6654. The $150,000 and $75,000 figures are statutory and not indexed.
- Wage withholding is deemed paid in equal installments across the four payment periods under IRC §6654(g) unless the taxpayer elects otherwise, whereas estimated payments are credited when made. This is why a late-year withholding increase can cure an earlier shortfall and a fourth-quarter estimated payment cannot.
The Intuit ESPP
- Plan name, Intuit Inc. Employee Stock Purchase Plan, as amended and restated 19 January 2023. There is no year in the plan name. Governing document filed as Exhibit 10.01 to the Form 10-Q for the quarter ended 31 January 2023. Qualified under IRC §423; note that non-U.S. sub-plans may fall outside §423 by design.
- Offering periods, verbatim from plan §5(a), six months' duration, one commencing each 16 September and ending the following 15 March, another commencing each 16 March and ending the following 15 September, each consisting of two three-month purchase periods commencing 16 September and 16 December, or 16 March and 16 June.
- Purchase price, verbatim from plan §8(a), "eighty-five percent (85%) of the lesser of: (i) The Fair Market Value on the Offering Date; or (ii) The Fair Market Value on the Purchase Date". Confirmed independently in the FY2025 Form 10-K, Note 11.
- The automatic reset, plan §8(b), if the fair market value on the first day of the second purchase period (16 June or 16 December) is lower than the offering-date value, a participant who purchased in the first purchase period is automatically withdrawn and re-enrolled in a new three-month offering period, with the new offering date's value replacing the original. Independently confirmed in the 2022 proxy. Because the grant date resets, the two-year holding period under IRC §423(a)(1) restarts.
- Contributions, up to 15% of compensation in 1% increments, where compensation means base salary, commissions and cash bonuses. May be decreased once per purchase period or suspended; may not be increased mid-offering-period. Enrolment windows are 15–31 August and 15–28/29 February.
- The $25,000 limit, IRC §423(b)(8) and plan §10(a) measure it at fair market value determined as of the offering date, at 100% rather than the 85% purchase price. Intuit's proxy states it is "based on 100% of the fair market value of the shares on the first day of the Offering Period". The effective cash outlay cap is therefore roughly $21,250. The $25,000 figure is statutory and has not been indexed since 1964.
- Holding periods, IRC §423(a)(1) requires no disposition within two years of the grant date nor within one year of the transfer of the shares. Both apply and the later date controls. Intuit's plan §28(h) defines the Notice Period in the same terms. IRS Publication 525 (2025) p.12 states the same rule.
- Qualifying disposition, ordinary income is the lesser of the excess of the grant-date value over the option price, or the excess of the disposition value over the amount paid. Because the option price is not fixed at grant, the first prong computes as 15% of the offering-date value. Remaining gain is long-term capital gain. Intuit's proxy states the arithmetic directly.
- Disqualifying disposition, ordinary income is the purchase-date value less the purchase price, uncapped and without reference to the offering-date price. That amount adds to basis; remaining gain or loss is capital.
- No employer withholding is required on ESPP compensation income under §423(c) in either case. It appears on the W-2 with no tax withheld against it.
- Form 3922, Transfer of Stock Acquired Through an ESPP under Section 423(c), is furnished for the year of transfer and carries the grant date, purchase date, offering-date fair market value, purchase-date fair market value and price paid.
- The lookback structure and the 85% discount are unchanged through the FY2023, FY2024 and FY2025 annual report footnotes. The most recent stockholder-approved amendment was a share reserve increase of 2,000,000 approved 19 January 2023.
- Share reserve, 25,800,000 cumulative with 1,657,666 remaining at 31 July 2025, against annual usage of roughly 306,000 to 400,000 over FY2023 to FY2025. Figures are as of that date; Intuit's FY2026 annual report had not been filed when this research was completed.
- NOT STATED, whether a Maximum Share Amount is in force. Plan §28(g) sets a default of 1,000 shares per offering period "until and unless the Committee provides otherwise", while the 2022 proxy states the Committee has not exercised that authority. The two are in tension and cannot be reconciled from public filings.
- NOT STATED, the effective rate of return implied by the discount. NOT STATED, Intuit's administered purchase dates, broker, sale restrictions or blackout overlay, none of which are filed. NOT STATED, whether Intuit payroll permits an elective higher supplemental withholding rate, which no public filing addresses.