TaxStrategies News & Analysis

NUA Rule Could Save $65,400 on $400,000 in Employer Stock

The Net Unrealized Appreciation (NUA) rule allows for tax savings on employer stock appreciation when retiring. For a 62-year-old engineer with $400,000 in employer stock and a $60,000 basis, using NUA could reduce federal tax liability to approximately $65,400, compared to a higher bill from a standard IRA rollover. The NUA rule applies to employees separating from service, reaching age 59½, or other criteria, and helps avoid increased taxes on Social Security and Medicare surcharges. This matters for investors as it signifies important tax strategies that can maximize retirement savings.