Safe harbor
110% safe harbor: how to not pay the underpayment penalty on RSUs.
Reviewed August 21, 2026. About. Not tax advice.
If your prior-year AGI was more than $150,000 ($75,000 if married filing separately), the federal estimated-tax safe harbor is 110% of last year’s tax. Hit that with withholding + 1040-ES and the IRS generally will not assess the underpayment penalty, even if you still write a large check at filing. 90% of this year’s tax is the other test; high RSU years usually fail 90% and lean on 110%. As of August 21, 2026, two installments remain: September 15, 2026 and January 15, 2027.
On the Bay Area sample
Last year federal tax $92,000 → 110% safe harbor $101,200. That number can be larger than the vest gap. Your CPA should tell you whether to aim at the gap, the harbor, or both.
FAQ
- Does extra W-4 withholding count toward safe harbor?
- Yes. Withholding is treated as paid evenly through the year. That is why some people dump extra W-4 in December and still satisfy estimated-tax rules. 1040-ES payments are dated when paid.
- What are the 2026 installment dates?
- April 15, June 15, September 15, and January 15 of the following year (or the next business day). This desk splits remaining gap across installments that have not yet passed. It does not file the voucher for you.
Sources
- IRS Publication 15 (Circular E) — Supplemental wage withholding: 22% up to $1 million, 37% above.
- IRS tax year 2026 inflation adjustments (Rev. Proc. 2025-32) — 2026 federal brackets and standard deduction.
- IRS estimated taxes — 1040-ES installment dates and underpayment penalty.