Are Restricted Stock Units Considered Income For Child Support Purposes? (New Caselaw)

We finally have an answer as to whether vested and delivered Restricted Stock Units (RSUs) should be included as income when calculating child support, and the answer is YES, according to the WA State Court of Appeals, Division 1.

First, what are RSUs? “Restricted stock units (RSUs) are a form of equity-based compensation consisting of contractual promises by an employer to deliver shares of stock at a future date once the RSUs have vested. Once vested and delivered, RSUs are taxed as ordinary income to the employee.” Ribnicky v. Sotaniemi (In re Parenting and Support of E.J.S.), No. 80912-1-I (Wash. Ct. App. Feb. 16, 2021).

In the Ribnicky case, the mother received RSUs as part of her compensation from her employer. She argued that vested and delivered RSUs should be considered income when calculating child support only if the stock is sold. The Court of Appeals disagreed with her. Thus, we now have a case of first impression in a published opinion filed on February 16, 2021: Ribnicky v. Sotaniemi (In re Parenting and Support of E.J.S.).  

The Court of Appeals provided the following reasons as to why non-liquidated RSUs should be treated as income when calculating of child support:

  • The definition of child support under the law is broad and includes all income from any source, unless expressly excluded by statute. RCW 26.19.070(1), (3). A “gain” received as compensation is also income.
  • Treating RSUs as income is consistent with federal income tax standards as RSUs are taxed. In the Ribnicky case, the mother’s taxable income included the market value of the units at the vesting date, and the units were taxed as ordinary income. Once delivered, the units are taxable regardless of whether they are liquidated.
  • RSUs are different than stock options and should be treated differently. Stock options are considered taxable income under federal income tax laws when exercised and cashed in, and vested, exercised, and cashed-in stock options are income for child support purposes. In re the Marriage of Ayyad, 110 Wn. App. 462, 38 P. 3d 1033 (2002). However, RSUs that are vested and delivered are worth their market value with no purchase price owing and taxed, even if not sold.

Although this new opinion provides a more definitive answer as to RSUs, determining income to calculate child support can be complicated. You should consult with an attorney to ensure all income is accounted for when calculating child support.

If you are seeking assistance in a child support related matter, you may contact our Family Law Group to schedule an in-person, telephone, or video consultation, via email to or by calling our office at (425) 776-4100.

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