FICA Taxes Supplemental Unemployment Benefit

Federal Insurance Contribution Act (FICA) Taxes are United States federal payroll taxes levied to fund the Social Security and Medicare system. FICA Taxes burdens are divided between employers and employees and... more +
Federal Insurance Contribution Act (FICA) Taxes are United States federal payroll taxes levied to fund the Social Security and Medicare system. FICA Taxes burdens are divided between employers and employees and are currently set at 12.4% for Social Security and 2.9% for Medicare. less -
News & Analysis as of

Sixth Circuit Denies Government Motion for Rehearing in Quality Stores Employment Tax Challenge

The Sixth Circuit has unanimously and summarily denied a Government request for en banc rehearing of a taxpayer-favorable ruling in United States v. Quality Stores, Inc., 693 F.3d 605 (6th Cir. Sept. 7, 2012)....more

Court Holds Severance Payments Not Subject To FICA Taxes; Refund Claims Should Be Filed Soon

In its recent decision, the United States Court of Appeals for the Sixth Circuit in U.S. v. Quality Stores, Inc., No. 10-1563 (6th Cir., 9/7/2012) held that certain severance payments made to former employees were not subject...more

Employers May Be Entitled to FICA Tax Refund On Severance Payments

If the recent decision of the Sixth Circuit Court of Appeals in United States v. Quality Stores survives appeal by the IRS, employers could be entitled to a refund of FICA taxes paid by them after 2008 on severance payments...more

Sixth Circuit Holds that Severance Payments Are Not Subject to FICA Taxes

In United States v. Quality Stores, Inc., et al., the United States Court of Appeals for the Sixth Circuit recently held that severance payments qualified as supplemental unemployment compensation benefit (SUB) payments and...more

Severance Payments Held to be Exempt From FICA Taxes; Creates Split in the Circuits

In a recent case, United States v. Quality Stores, the Sixth Circuit ruled that certain severance payments paid to involuntarily terminated employees pursuant to an employer’s reduction in workforce are not “wages” for FICA...more

Quality Stores, Inc. Update

Department of Justice files petition for rehearing en banc, challenging the Sixth Circuit's recent decision that severance payments paid pursuant to an involuntary reduction in force are exempt from FICA taxes. On...more

Sixth Circuit Nixes FICA Tax on Severance Pay

The U.S. Court of Appeals for the Sixth Circuit has affirmed a Michigan Bankruptcy Court and approved a taxpayer’s request for a refund of FICA taxes paid on behalf of former employees. Quality Stores et al....more

FICA Taxes on Certain Severance Pay May Be Refundable

The IRS may owe FICA tax refunds on severance payments made by employers to laid-off or terminated employees as part of reductions in workforce. Every employer that paid severance to laid-off employees as part of a reduction...more

Employers Should Evaluate Refund Opportunities Following Sixth Circuit Ruling on FICA Taxes and Severance Payments

In United States v. Quality Stores, Inc., the Sixth Circuit held that payments of supplemental unemployment benefits (SUB payments) are not taxable wages subject to FICA tax withholding. Although the issue is not finally...more

Wages May Not Be Wages: the Sixth Circuit Addresses Supplemental Unemployment Compensation Benefits, Part III.

This concludes my analysis of the Sixth Circuit's opinion in Quality Stores, highlighting the differences between its approach and the approach followed by the Federal Circuit in CSX....more

Quality Stores Decision Could Lead to Significant Refunds of FICA Tax

The U.S. Court of Appeals for the Sixth Circuit recently held that certain dismissal payments were Supplemental Unemployment Compensation Benefits (SUB) exempt from FICA taxes—a clear split with the U.S. Court of Appeals for...more

Possible FICA Tax Savings on Severance Pay

A recent Sixth Circuit Court of Appeals decision concluded that severance pay provided to employees as a result of layoff or discontinuance of a plant, operations or other similar condition is exempt from FICA taxes....more

Pepper Victory: Sixth Circuit Holds that Supplemental Unemployment Compensation Benefits Are Not ‘Wages’ Subject to FICA Taxation

In an important recent decision, United States v. Quality Stores, Inc., et al., in which Pepper represented the prevailing party, the U.S. Court of Appeals for the Sixth Circuit held that supplemental unemployment...more

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