US Supreme Court Rules Severance Pay Subject to FICA Taxes

Maynard Nexsen
Contact

This week, the U.S. Supreme Court confirmed that severance pay is subject to FICA tax. (Read the March 25th opinion).

There had been uncertainty about whether FICA taxes were due on severance payments following disparate circuit court rulings in two cases: CSX Corp. v. U.S. and U.S. v. Quality Stores.

The Court ruled in Quality Stores that, except in very narrow circumstances involving severance pay that is tied to the receipt of state unemployment benefits, severance pay is “wages” for FICA tax purposes.


 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

© Maynard Nexsen

Written by:

Maynard Nexsen
Contact
more
less

PUBLISH YOUR CONTENT ON JD SUPRA NOW

  • Increased visibility
  • Actionable analytics
  • Ongoing guidance

Maynard Nexsen on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide