What is an RSA
A restricted stock award is a grant of actual shares. The shares are typically transferred to you at the time of grant, but they come with restrictions, usually a vesting schedule that determines when the shares are fully yours. Until the shares vest, they are generally subject to forfeiture or repurchase if you leave the company.
What is an RSU
A restricted stock unit is not a share, it is a promise to deliver shares in the future, typically when the units vest. No shares are transferred at grant, and you do not have shareholder rights until the units convert to shares at settlement.
For many employees, RSUs are easier to follow than other equity structures because the timing is straightforward: units vest, shares are delivered, income is recognized.
How they differ on ownership
The ownership difference is the most fundamental distinction. With an RSA, you are generally the legal owner of shares from the beginning, subject to forfeiture restrictions until vesting is complete, but a shareholder nonetheless. With an RSU, you hold a contractual right to receive shares in the future, and nothing is transferred until settlement.
That difference has direct implications for shareholder rights and for which tax elections may be available.
How they differ on tax timing
For RSAs, compensation income is generally recognized as shares vest, based on the value at each vesting date, unless an 83(b) election is made, in which case income is recognized at grant instead.
For RSUs, compensation income is generally recognized when units vest and shares are delivered. There is no 83(b) election available because no property is transferred at grant.
In both cases, the income recognized is typically treated as ordinary compensation income in the year it is recognized.
Why 83(b) only comes up with RSAs
Because RSAs involve an actual transfer of shares at grant, they are the situation where an 83(b) election may be relevant, allowing income to be recognized at grant rather than over the vesting schedule. Whether that election makes sense depends on the share value at grant, the vesting timeline, and expectations about future appreciation.
Once the grant type is clear
The planning questions that follow, around tax timing, concentration, and whether an 83(b) election is worth considering, depend on which type of grant you actually have. What matters is understanding what you own today, what can still be forfeited, and when the tax system treats the value as income.