⚡ Quick Answer
Your employer filed an LCA with a prevailing wage. You can look it up. Most H1B holders don't — and accept salaries 10–20% below market. Here's how to negotiate.
H1B Salary Negotiation: How to Use LCA as Your Leverage
Your employer filed an LCA with a prevailing wage. You can look it up. Most H1B holders don't — and accept salaries 10–20% below market. Here's how to negotiate.
Important for H1B holders: Equity compensation creates complex tax situations that most general CPAs miss. Always work with a CPA who has experience with non-resident alien and equity compensation returns.
Why Equity Compensation Is Different on H1B
As an H1B holder, equity compensation is complicated by:
- Mobility — if you change employers, unvested equity is typically forfeited
- India service period — RSUs granted during India employment may be taxed by India too
- Return to India — unvested RSUs at departure create complex tax events
- AMT — ISO exercises can trigger Alternative Minimum Tax even if you don't sell
Key Tax Rates for H1B Equity Income (2026)
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| Income Type | Federal Rate | FICA | State (CA) | Total Worst Case |
|---|---|---|---|---|
| RSU vesting | 22–37% | 7.65% | 13.3% | ~58% |
| Short-term gains | 22–37% | 0% | 13.3% | ~50% |
| Long-term gains | 0–20% | 0% | 13.3% | ~33% |
| ISO exercise (AMT) | 26–28% | 0% | 0–7% | ~35% |
Strategy Framework
Maximize Equity Capture
- Never leave unvested equity — negotiate accelerated vesting before changing jobs
- Track all vest dates — create a calendar; each vest date is a taxable event
- Hold for LTCG when safe — if you have high conviction in the stock and can tolerate risk
- Sell immediately for cash — eliminates concentration risk; accept short-term rates
Tax Minimization
- Max 401k — reduces ordinary income, saves 22–37% on the RSU income
- Charitable donations — donate appreciated stock instead of cash (skip capital gains)
- Tax-loss harvesting — offset gains with losses in your brokerage account
- Form 1116 — claim foreign tax credit if India taxes the same equity income
Equity When You Leave the US
If you're returning to India with unvested RSUs:
- RSUs that vest after you return to India are subject to Indian income tax
- Any remaining US tax treaty benefit may apply
- Coordinate timing with your immigration attorney and CPA
- The 60 days between layoff and departure creates a compressed timeline for decisions
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