NUA Qualified For Phillips 66 Employees?

Healthcare Provider Update: Healthcare Provider for Phillips 66 Phillips 66 offers healthcare coverage through multiple providers, primarily Aetna and Blue Cross Blue Shield (BCBS), depending on the employee's home ZIP code. Employees also have access to a Kaiser HMO option if they live in designated areas of California or Washington. The medical plans include comprehensive coverage for various healthcare services, including preventive care, regular checkups, mental health, and substance use disorder treatments. Potential Healthcare Cost Increases in 2026 Healthcare costs for Phillips 66 employees can be expected to rise significantly in 2026, reflecting broader trends impacting the Affordable Care Act (ACA) marketplace. As major insurers are filing for rate increases that may exceed 60% in certain states, Phillips 66 employees could face steep hikes in out-of-pocket premiums, especially if federal subsidies are not extended. The combination of escalating medical costs and the potential loss of enhanced subsidies means many employees may see their premium costs increase substantially, leaving them with difficult choices regarding their healthcare coverage amidst these changing economic conditions. Click here to learn more

In order to help our clients from Phillips 66 understand just how NUA can be used, we'd first like to make sure our Phillips 66 clients understand qualified accounts that this tax trick can be used in and how they differ in tax treatment compared to non-qualified accounts. Qualified accounts (i.e. Traditional 401(k)) are designed to offer individuals added tax benefits. In a qualified account, you can make contributions with pre-tax dollars from your income, which lowers your tax bill for that year. 

As Phillips 66 shares climb on a 10% oil-price spike driven by the Iran–Hormuz crisis, employees of this diversified downstream operator face a classic “champagne problem”: soaring stock grants and capital gains pushing them into higher brackets. With the One Big Beautiful Bill permanently extending TCJA rates and raising the SALT cap to $40,400, now is the window to evaluate Net Unrealized Appreciation (NUA) strategies and Roth conversions to lock in favorable long-term capital gains treatment.

'Qualified accounts (i.e. Traditional 401(k)) are designed to offer individuals added tax benefits.'

The Strait of Hormuz crisis of early 2026 — triggered by U.S.-Israel military operations against Iran — has sent oil prices surging, with Brent briefly exceeding $112/barrel before easing back near ~$99 in late March.

Such a rapid run-up in commodity prices can accelerate vesting economics for performance-based equity awards tied to total shareholder return or relative sector benchmarks at companies like Phillips 66.

Financial planners recommend that employees revisit their tax bracket projections now, as significant stock appreciation combined with elevated energy prices may push total 2026 compensation well above prior-year estimates used for tax withholding purposes.

In addition, no tax is paid on appreciation until withdrawals are made. At the point withdrawals are made (tax penalty for withdrawals before 59½ and required minimum distributions [RMDs] after 70) both appreciation and invested amounts are taxed as ordinary income.

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On the other hand, we'd like to point out to our Phillips 66 clients that non-qualified plans are those (i.e. a standard brokerage
account) that are not eligible for tax-deferral benefits. Investments are paid
for with after-tax dollars. When appreciated shares are liquidated (a gain is
“realized”), the difference between cost basis (original cost at purchase) and sales price is taxed at either short-term or long-term capital gains rate depending on how long they were held, in addition to taxes paid on dividends the year they are received. Funds from non-qualified accounts are neither subject to early withdrawal penalties nor RMDs.