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Internal Revenue Service FICA Taxes Severance Pay

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.  
Foley & Lardner LLP

How Do I Report Non-Qualified Plan or Severance Payments to a Former Employee? Hint: You Should Probably Use a W-2, Not a 1099!

Foley & Lardner LLP on

Employers commonly make payments to former employees for a number of reasons. Two of the more routine payments are those from a non-qualified deferred compensation plan (such as payments from a supplemental executive...more

Orrick - Employment Law and Litigation

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

McDermott Will & Emery

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

McDermott Will & Emery on

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

Proskauer - Employee Benefits & Executive...

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

Baker Donelson

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

Baker Donelson on

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

Stinson - Benefits Notes Blog

The Supreme Court Will Decide Whether FICA Taxes Is Owed On Severance Pay

I blogged about Quality Stores, a case in which the Sixth Circuit Court of Appeals held that severance pay is not subject to FICA (Social Security) taxes if certain requirements are met: The severance payments must be made...more

Sheppard Mullin Richter & Hampton LLP

Deadline for Filing FICA Tax Refunds is April 15

As previously reported, the payment of certain severance benefits may be exempt from FICA taxes. Under the Sixth Circuit’s decision in Quality Stores, severance pay made in connection with an involuntary separation from...more

Sheppard Mullin Richter & Hampton LLP

File for FICA Tax Refunds Before April 15

As previously reported, the payment of certain severance benefits may be exempt from FICA taxes. Under the Sixth Circuit’s decision in Quality Stores, severance pay made in connection with an involuntary separation from...more

Proskauer Rose LLP

Sixth Circuit Will Not Rehear Quality Stores Decision that Severance Pay in Connection with a Reduction in Force is not Subject to...

Proskauer Rose LLP on

On September 7, 2012, the Sixth Circuit Court of Appeals held in United States v. Quality Stores, Inc. that severance payments to former employees pursuant to an involuntary reduction in force are not taxable "wages" for...more

Eversheds Sutherland (US) LLP

Legal Alert: The 2012 Tax Litigation Year in Review: Important Events

The year 2012 was quite an interesting one for tax controversy. Whereas 2011 brought a win for the Treasury on deference issues in Mayo Foundation for Medical Ed. v. United States, 131 S. Ct. 704 (2011), 2012 was the year...more

Polsinelli

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

Polsinelli on

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

Dickinson Wright

Sixth Circuit Nixes FICA Tax on Severance Pay

Dickinson Wright on

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

Foley & Lardner LLP

FICA Taxes on Certain Severance Pay May Be Refundable

Foley & Lardner LLP on

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

Ballard Spahr LLP

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

Ballard Spahr LLP on

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

McDermott Will & Emery

Quality Stores Decision Could Lead to Significant Refunds of FICA Tax

McDermott Will & Emery on

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

Ogletree, Deakins, Nash, Smoak & Stewart,...

Sixth Circuit Decision Offers FICA Tax Refund Opportunities for Severance Pay

Any employer that implemented reductions in force or layoffs after 2008 should consider filing refund claims for the Federal Insurance Contributions Act (FICA) taxes paid on severance benefits based on a recent Sixth Circuit...more

Troutman Pepper

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

Troutman Pepper on

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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