Posts tagged Severance Pay.
Severance Pay As Wages: Business As Usual

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 withholding requirements. Specifically, United States v. Quality Stores, Inc. was a bankruptcy case which involved an attempt by Quality Stores to claw back taxes paid in connection with severance to workers. The issue on appeal was whether supplemental unemployment compensation benefits, which was how both the taxing authorities and Quality Stores ...

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