April 4th Deadline for FICA Tax Treatment of Severance Pay Under Quality Stores

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Two deadlines relating to the Sixth Circuit Court of Appeals’ decision in United States v. Quality Stores, Inc., No. 10-1563 (6th Cir. Sept. 7, 2012), are quickly approaching. The deadline for the United States to file a petition for certiorari to the Supreme Court is April 4, 2013 and the deadline for employers to file refund claims is April 15, 2013.

All employers that have paid severance in connection with involuntary workforce reductions should consider filing FICA-tax refund claims, even if their principal place of business is not located in the Sixth Circuit (that is, Kentucky, Michigan, Ohio, and Tennessee).

Click here to read the full article  that discusses:

  • The upcoming April 2013 deadlines;
  • The process for filing a refund claim;
  • What to expect after filing a refund claim; and
  • Two common employer questions:
    • Should we continue to pay and withhold FICA taxes on involuntary severance benefits? and
    • Can we file refund claims based on Quality Stores if we do not have a formal, written severance plan or policy?

Stay tuned for an upcoming blog on the differences between traditional supplemental unemployment benefit plans and severance plans.