News & Analysis as of September 21, 2024

Internal Revenue Service

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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 +

U.S. Department of Labor's New Guidance on Independent Contractors Highlights a Key Risk Area for Employers

Stinson LLP on 7/21/2015

Businesses should carefully assess any independent contractor arrangements in light of an “Administrator’s Interpretation” issued on July 15, 2015 by the U.S. Department of Labor’s Wage and Hour Division (DOL). While the...more

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

Orrick - Employment Law and Litigation on 2/26/2015

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

Severance Payments are Taxable under FICA

Sheppard Mullin Richter & Hampton LLP on 3/31/2014

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

Ervin Cohen & Jessup LLP on 3/31/2014

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

Ballard Spahr LLP on 3/31/2014

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

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

McDermott Will & Emery on 3/27/2014

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

Proskauer Rose LLP on 2/24/2014

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

The ERISA Litigation Newsletter; November 2013

Proskauer - Employee Benefits & Executive... on 11/22/2013

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

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

Baker Donelson on 10/17/2013

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

McDermott Will & Emery on 10/17/2013

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

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

Stinson - Benefits Notes Blog on 10/11/2013

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

IRS Provides FICA Reporting, Withholding, and Other Guidance Regarding Married Same-Sex Couples

Littler on 10/8/2013

Until the United States Supreme Court decision in United States v. Windsor, 570 U.S. ___ (2013), the Defense of Marriage Act (DOMA) required employers providing subsidized benefits to same-sex spouses and domestic...more

IRS Provides Special Rules for Refund of Employer-Paid Taxes Related to Imputed Income for Same-Sex Spouse Benefits

Katten Muchin Rosenman LLP on 10/2/2013

On September 23, the Internal Revenue Service released Notice 2013-61, which provides special rules for those making claims for refunds or adjustments of Federal Insurance Contributions Act (FICA) taxes and federal employment...more

IRS Issues Notice on Special Tax Adjustment Procedures for Same-Sex Marriages

Morgan Lewis on 9/27/2013

Notice 2013-61 provides alternative administrative procedures for reporting income and FICA tax adjustments in response to the Windsor decision and Revenue Ruling 2013-17. On September 24, the U.S. Department of the...more

Still Tied Up In Knots - IRS and DOL Guidance on Same-Sex Marriage Following Supreme Court’s Windsor Decision

Dechert LLP on 9/27/2013

As we previously reported, in United States v. Windsor, 133 S. Ct. 2675 (2013), the U.S. Supreme Court held section 3 of the Defense of Marriage Act to be unconstitutional. Section 3 of the Defense of Marriage Act provides...more

Treasury Department Guidance on Same-Sex Spousal Status Requires Employers to Take Immediate Action on Employee Benefit Plans

BakerHostetler on 9/9/2013

Earlier this summer, following the Supreme Court's issuance of the landmark case, United States v. Windsor, which held Section 3 of the Defense of Marriage Act (DOMA) to be unconstitutional, we published an Executive Alert...more

Supreme Court DOMA Decision—Part II: Wage Overstatements and Tax Refunds

Ogletree, Deakins, Nash, Smoak & Stewart,... on 7/26/2013

In part one of this two-part series, “Supreme Court DOMA Decision — Part I: Fringe Benefits and Other Tax Implications,” I reviewed the fringe benefit and tax implications of the United States v. Windsor decision....more

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

Eversheds Sutherland (US) LLP on 1/16/2013

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

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