I experienced my first eTrade this morning. While I was sleeping, they sold 56 of my restricted Intel shares, leaving me with 78. When I called for an explanation, I was told that it's an automatic transaction scheduled on my behalf to cover taxes.
I was surprised to learn that they were being collected on behalf of my employer. That's not the right amount for a capital gains tax, and I don't think I've realized the capital gain yet.
Will I be taxed again when I sell them?
When I did the math on the potential capital gain for the grant, it came in around 25 shares... leaving me to wonder, how is it really taxed, and how much of this money will actually be mine to keep?
Further research reveals that it's called withholding. It's required by the Canadian Income Tax Act. The 2010 federal budget changed employer withholding requirements on stock option benefits to shift the tax collection risk to the employer, effective January 1, 2011.
Update, January 31:
"This order was initiated by your employer based on your restricted stock tax payment election. You can review your elections any time by logging into etrade.com. At the top of the page, just below the main tabs, click Plan Elections."
