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The issue is not that they want their withholding to be correct for the taxes they owe. The issue is the company needs to follow the withholding rules, and probably for cashflow reasons or maybe for tricky equity law reasons, would like the former employee to provide the withholding, rather than a net share settlement or sell to cover.

This should count as a supplemental wage payment. The 22% rate for supplemental wages only applies if income is under $1M and the person was paid wages by the employer this year or last; details in publication 15 https://www.irs.gov/publications/p15#en_US_2025_publink10002...