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Florida · qsbs

QSBS in Florida: federal Section 1202 and state conformity

Whether Florida honors the federal QSBS gain exclusion on Section 1202 stock — and what it means for founders and early employees selling after five years.

What Florida residents actually pay

Florida has no state income tax on wages. That removes a layer — but federal AMT, federal capital gains, and the 3.8% Net Investment Income Tax still apply, and a prior state may still have a claim.

No state income tax; popular for post-IPO relocations from CA/NY. Miami is a growing tech hub.

Federal Section 1202

Qualified Small Business Stock (QSBS) lets you exclude up to $10M or 10× your basis (whichever is greater) in federal capital gains on eligible C-corp stock held at least five years. The stock must have been acquired at original issuance from a company with under $50M in gross assets at the time.

Florida conformity

Florida has no state income tax, so federal QSBS exclusion is the only layer you interact with here. That's a meaningful reason founders relocate before a sale — though trailing-state rules can still apply.

Frequently asked

Does Florida tax RSU income the same as wages?
Florida has no state income tax on wages, so RSU ordinary income is federal-only. Note that Washington residents still owe the 7% state long-term capital gains tax on sales above the threshold, and other states may claw back some income if your grant pre-dated your move.
What happens if I exercise ISOs while living in Florida?
Florida does not run a separate state AMT, so only federal AMT applies. You still need to model the bargain element carefully if you plan a cashless exercise-and-sell.
I moved to Florida from another state. Who taxes my vesting RSUs?
Most high-tax states (CA, NY, MA) source RSU ordinary income to workdays between grant and vest. If your grant pre-dates your Florida move, expect the old state to tax the portion of each tranche attributable to workdays earned there. Florida taxes the remainder.
Can I reduce Florida taxes by timing my RSU sales?
Florida has no state income tax, so sale timing affects only your federal bill. NIIT and federal capital-gains brackets are still in play.

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