News & Analysis as of September 19, 2024

Severance Pay

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Income taxes are taxes that are collected on the individual earnings of persons or entities. Depending on the jurisdiction, income taxes are calculated and collected in a variety of ways. Some tax systems collect income taxes based on a progressive scheme, while others may utilize a proportional or regressive framework. less -

Puerto Rico’s Taxation of Severance Payments

Ogletree, Deakins, Nash, Smoak & Stewart,... on 6/22/2020

Employers considering reductions in force in Puerto Rico should be aware that the rules on the taxation of severance pay in the United States and Puerto Rico are different. The U.S. rule is straightforward: severance pay...more

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 7/10/2018

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

Proposed Section 409A Regulations Would Clarify Separation from Service Analysis in Connection with Change in Status From Employee...

Proskauer - Tax Talks on 7/15/2016

Pursuant to the final regulations under Section 409A of the Internal Revenue Code of 1986, as amended, a termination of employment generally occurs at such time as the employer and employee reasonably anticipate that the...more

Good News! New 409A Regulations (Yes, Really!) – Part 1: Firing Squad

BCLP on 7/9/2016

On the TV show Futurama, the aged proprietor of the delivery company Planet Express, Professor Hubert J. Farnsworth, had a habit of entering a room where the other characters were gathered and sharing his trademark line,...more

IRS Issues Regulations Affecting Compensation Arrangements at Tax-Exempt Organizations

McDermott Will & Emery on 6/23/2016

On June 21, the IRS issued long awaited proposed regulations under Section 457 of the Internal Revenue Code that affect a broad range of compensation arrangements at tax exempt organizations. If a compensation arrangement is...more

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