News & Analysis as of

Severance Pay Internal Revenue Service Supplemental Unemployment Benefit

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

by 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

Sixth Circuit Nixes FICA Tax on Severance Pay

by 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

FICA Taxes on Certain Severance Pay May Be Refundable

by 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

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

by 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

Quality Stores Decision Could Lead to Significant Refunds of FICA Tax

by 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

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

by Pepper Hamilton LLP 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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