News & Analysis as of September 19, 2024

Wages

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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 +

Supreme Court Confirms FICA Taxes Must be Withheld from Severance Payments

Fenwick & West LLP on 4/23/2014

Finding severance payments to be a form of “remuneration for employment,” the United States Supreme Court in United States v. Quality Stores, Inc. held that such payments are taxable wages – and thus subject to withholding –...more

Fenwick Employment Brief - April 2014

Fenwick & West LLP on 4/22/2014

Supreme Court Confirms FICA Taxes Must be Withheld from Severance Payments - Finding severance payments to be a form of “remuneration for employment,” the United States Supreme Court in United States v. Quality Stores,...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

Is the Severance that Your Company Pays to Fired Workers Taxable? The Supreme Court Will Decide

Ogletree, Deakins, Nash, Smoak & Stewart,... on 10/4/2013

On October 1, 2013, the Supreme Court of the United States agreed to hear a case concerning whether employees’ severance payments are taxable. The case, United States v. Quality Stores, Inc., came out of the Sixth Circuit...more

A FICA Refund for Employers? Supreme Court to Decide Whether FICA Obligations Extend to Severance Pay

Mintz - Employment, Labor & Benefits... on 10/3/2013

As all employers know, wages paid to employees are subject to required withholdings and deductions for income taxes and employee contributions to Social Security and Medicare (which is commonly referred to in shorthand as...more

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 1/21/2013

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

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

Ballard Spahr LLP on 10/12/2012

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

Sixth Circuit Decision Offers FICA Tax Refund Opportunities for Severance Pay

Ogletree, Deakins, Nash, Smoak & Stewart,... on 9/11/2012

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

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FICA Taxes › Severance Pay › Wages

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