Helping clients meet their business challenges begins with an in-depth understanding of the industries in which they work. That’s why KPMG LLP established its industry-driven structure. In fact, KPMG LLP was the first of the Big Four firms to organize itself along the same industry lines as clients.

How We Work

We bring together passionate problem-solvers, innovative technologies, and full-service capabilities to create opportunity with every insight.

Learn more

Careers & Culture

What is culture? Culture is how we do things around here. It is the combination of a predominant mindset, actions (both big and small) that we all commit to every day, and the underlying processes, programs and systems supporting how work gets done.

Learn more

Timing of employment taxes for RSUs under current SEC settlement timelines

This article discusses the SEC's proposals of moving to a shorter securities settlement cycle from T+2 to T+1 and the timing of employment taxes for restricted stock units (RSUs).

In February 2022, the Securities and Exchange Commission (SEC) announced proposals that the U.S. will be moving to a shorter securities  settlement cycle from T+2 to T+1. This change is scheduled to occur in May 2024 and follows an earlier reduction five years ago from T+3 to T+2. The SEC indicated that the amended rule was designed to enhance efficiency, reduce risk, and ensure a coordinated and expeditious transition by market participants to a shortened standard settlement cycle (87 Fed. Reg. 10436 [February 9, 2022]).

In parallel, financial institutions have developed more efficient trading platforms, with enhanced technology that allows them to settle trades earlier. While a compressed settlement window may not pose a challenge to those institutions, it does pose challenges to U.S. employers operating large-scale global equity plans, who are required to be tax compliant globally and across a diverse population of domestic and cross-border employees, requiring automated program integrations with brokerage firms to remain compliant.  Because the IRS through a nonenforcement policy has adapted the federal employment tax reporting and withholding system to accommodate the required settlement cycle, the further compressed settlement window directly affects the timetables for the related wage payment processing.  Further complexities will arise and adjustments to processes will be needed to ensure timely deposits of U.S. employment taxes, in particular when the next-day deposit rules apply. Given the additional time pressures caused by T+1, companies are urged to consider a comprehensive review of their processes to ensure compliance with the next day deposit rules, and to make other enhancements where necessary. 

This article discusses the application of Generic Legal Advice Memorandum (GLAM) dated May 18, 2020 ( and the nonenforcement policy relief provided under the Internal Revenue Manual (IRM) Procedural Update dated May 26, 2020 (sbse-20-0520-0642) to address issues that have arisen for companies in applying the relevant guidance in practice, in particular with respect to restricted stock units (RSUs).

Dive into our thinking:

Timing of employment taxes for RSUs under current SEC settlement timelines

Download our full article for insights into the employment tax considerations and the impacts of the SEC's timelines.

Download PDF

Explore more

Meet our team

Image of Parmjit Sandhu
Parmjit Sandhu
Principal, Global Reward Services, KPMG US
Image of Stephen Tackney
Stephen Tackney
Principal, Washington National Tax, KPMG US

Explore other services tailored to your business

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.