How to Withhold Taxes for Severance

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How to Withhold Taxes for Severance – This is a place for the community to provide tips and advice on How to Withhold Taxes for Severance. This topic was created by Darlene Seta and the tips are provided by the community. The tips you add here can be your own or referred from another site. The best tips are then ranked at the top when up-voted by members of the community.

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How to Calculate a Severance Pay Deduction More
Published: 9 years, 3 month(s) ago by Charles Fewell | permalink
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The Internal Revenue Service considers severance pay as supplemental income and, as such, taxes it according to the employee's tax rate. Employers pay severance pay based on the amount of time an ...

For further reading: http://smallbusiness.chron.com/calculate-severance-pay-deduction-16706.html ^[1]

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U.S. Tax Laws for Severance Pay More
Published: 9 years, 3 month(s) ago by Alan Millard | permalink
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Federal law regards severance pay as a matter between you and your employer. A few states make severance pay mandatory to a limited number of employees, such as public workers, or during certain ...

For further reading: http://budgeting.thenest.com/us-tax-laws-severance-pay-26975.html ^[2]

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Supreme Court Rules Companies must Pay Taxes on Severance Payments More
Published: 9 years, 3 month(s) ago by stuart crepea | permalink
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Results of the U.S. Supreme Court's ruling regarding US vs. Quality Stores Inc. that severance pay is indeed taxable under FICA.

For further reading: http://www.paychex.com/articles/payroll-taxes/supreme-court-rules-companies-must-pay-taxes-on-severance-payments ^[3]

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Severance Payments Subject to FICA Withholding More
Published: 9 years, 3 month(s) ago by Jena Gardner | permalink
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The Supreme Court, reversing a decision of the Sixth Circuit, held that severance payments to terminated employees are subject to FICA withholding.

For further reading: http://www.thetaxadviser.com/issues/2014/jun/tax-trends-01.html ^[4]

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Category: Fun | 9 years, 3 month(s) ago

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Contributors

Jena Gardner, stuart crepea, Alan Millard, Charles Fewell

References & Citations

1. http://smallbusiness.chron.com/calculate-severance-pay-deduction-16706.html

2. http://budgeting.thenest.com/us-tax-laws-severance-pay-26975.html

3. http://www.paychex.com/articles/payroll-taxes/supreme-court-rules-companies-must-pay-taxes-on-severance-payments

4. http://www.thetaxadviser.com/issues/2014/jun/tax-trends-01.html