Internal Revenue Service FICA Taxes

The United States Internal Revenue Service is a bureau of the United States Department of the Treasury. The IRS is charged with collecting revenue and enforcing the Internal Revenue Code.  
News & Analysis as of

IRS Announces That It Will No Longer Refund FICA Taxes on Severance Payments

The IRS recently announced that severance payments are taxable wages under FICA, and thus employers who seek tax refunds on those payments will be denied. The IRS’s position reflects the United States Supreme Court’s ruling...more

Not Paying Your Employment Taxes? Prison Time Could Be In Your Future

It is a very common story for small businesses to get behind on paying employment taxes. Federal employment taxes are largely made up of FICA and withholding taxes. The IRS is especially keen on businesses who fail to pay...more

2015 Cost-Of-Living Adjustments Applicable To Employee Benefit Plans

Elective Deferral Contributions: For the 2015 calendar year, the annual limitation under Code section 402(g)(1) on the amount of elective deferrals to Code section 401(k) plans, Code section 403(b) plans, and Code section...more

Employer Reimbursement of Employee’s Individual Medical Insurance May Subject Employer to Penalty

IRS Notice 2013-54 provides that an employer’s reimbursement of healthcare insurance premiums paid by an employee on an individual health insurance contract of the employee on a pre-tax basis (an “employer payment plan”) may...more

Employee Benefits Developments - June 2014

In This Issue: - Rulings, Opinions, Etc. ..Validating Rollover Contributions: New Guidance - Case ..Stock Drop Case Development: The Supreme Court Rejects The Presumption Of Prudence ..Dividend...more

FICA Tax Imposed on Compensation That Will Never Be Received

FICA tax is normally collected through withholding at the time the underlying compensation (“wages”) is received. Under a special rule in the Internal Revenue Code, however (the “special timing rule”), FICA with respect to...more

Religious Institutions Update - Lex Est Sanctio Sancta

"Church plans" are pension plans (including defined benefit or defined contribution plans) exempt (without an irrevocable election) from many of the legal requirements of the Employee Retirement Income Security Act (ERISA)...more

Court’s Ruling Holding Corporate Officer Responsible for Trust Fund Recovery Penalty Illustrates Risk of Personal Liability for...

A district court in the Northern District of California has held that the officer of a now-defunct corporation is personally responsible for the Trust Fund Recovery Penalty based upon the company’s failure to collect, account...more

Tax Alert: New Executive Compensation Regulations Clarify Timing of Taxation

The Internal Revenue Service recently published final regulations under Section 83 of the tax code. These regulations deal with the timing for taxation for grants of property (e.g., stock) that are subject to...more

Monthly Benefits Update

As expected, the Department of the Treasury and the IRS (the “Agencies”) finalized the employer information reporting requirements under the Affordable Care Act (the “ACA”) earlier this month. The final rules, which are...more

Severance Payments are Taxable under FICA

On Tuesday, March 25, 2014, the U.S. Supreme Court ruled in favor of the Internal Revenue Service in a dispute over the payroll tax treatment of certain types of severance compensation....more

Severance Pay As Wages: Business As Usual

Confirming what most employers have long assumed to be true, this week the U.S. Supreme Court held that severance payments made to terminated employees are “wages” subject to the Federal Insurance Contributions Act (FICA) tax...more

Supreme Court Rules That Severance Payments Are Subject to FICA Taxes

The U.S. Supreme Court has unanimously held that payments of supplemental unemployment benefits (SUB payments) are taxable wages subject to FICA tax withholding. The Court’s decision in United States v. Quality Stores, Inc.,...more

IRS Issues Final Regulations on Substantial Risks of Forfeiture under Code Section 83

On February 25, 2014, the Treasury Department issued final regulations identifying the circumstances in which a substantial risk of forfeiture would exist under Section 83 of the Internal Revenue Code (the “Code”)....more

Supreme Court Decides in Favor of IRS in Quality Stores: FICA Generally Applies to Severance Payments

The Supreme Court of the United States has decided in favor of the Internal Revenue Service in United States v. Quality Stores, Inc., holding that severance payments made pursuant to plans that did not tie payments to the...more

The ERISA Litigation Newsletter - February 2014

The employee benefits issues to be considered by the U.S. Supreme Court continue to be of great significance to plan sponsors and fiduciaries. This month we review the Court's employee benefit decisions from 2013 and also...more

Restaurant Industry Newsletter - January 2014

Tax Ruling Impacts the Use of Mandatory Service Charges - Executive Summary: Beginning on January 1, 2014, "mandatory gratuities" or service charges are no longer considered "tips" by the Internal Revenue Service, and...more

Automatic Gratuities Are Now Wages For FICA Tax Purposes

Restaurateurs and wait staff beware: beginning this month, the IRS will classify automatic gratuities not as "tips," but as service charges reportable as regular wages which are subject to payroll tax withholdings. ...more

Year-End Health and Retirement Plan Guidance Grab Bag

Following Hawaii’s enactment of legislation recognizing same-sex marriage as of and after December 2, 2013 a number of additional pieces of guidance were also issued. Internal Revenue Service’s Frequently Asked Questions...more

The ERISA Litigation Newsletter; November 2013

In This Issue: - Labor and Employment and ERISA Class Actions After Wal-Mart and Comcast — Practice Points for Defendants (Part I – Commonality)* - Agencies Release Guidance on HRAs, FSAs, and Employer Payment...more

Treasury Department/IRS Issue Guidance Instructing Employers on How to Make Claims for FICA Refunds or Credits Post-Windsor

On June 26, 2013, in United States v. Windsor, the Supreme Court held that section 3 of the Defense of Marriage Act (DOMA) is unconstitutional. (For a discussion of the issues and holding in United States v. Windsor, please...more

Monthly Benefits Update - October 2013

Health & Welfare Plans - Health Care Reform: Federal Health Insurance Marketplace Opens With Technical “Glitches” - The federal health insurance marketplace (also known as the federal “exchange”) began accepting...more

Year 2014 IRS Dollar Limits

The IRS announced the Year 2014 cost-of-living adjustments for various provisions affecting employee benefit plans. The following table shows certain Year 2014 limits and those from prior years. ...more

Severance Payments: To Tax or Not to Tax, that is the Question!

On October 1, 2013, the U.S. Supreme Court agreed to hear the federal government's appeal of the Sixth Circuit Court of Appeals' decision in United States v. Quality Stores, Inc. (In re Quality Stores, Inc.), 693 F.3d 605...more

IRS Guidance on Employment and Income Tax Refunds on Same-Sex Spouse Benefits

Employers extending benefit coverage to employees’ same-sex spouses and partners should review their payroll procedures to ensure that such coverages are properly taxed for federal income and FICA tax purposes. Employers...more

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