dia.jpg

Are Severance Payments Taxed by the Feds?

Apr 22, 2015

Are Severance Payments Taxed by the Feds?

By: Craig T. Watrous

With tax season just behind us we thought it worthwhile to post a question that comes up regularly with regards to employment termination and severance packages.  Are severance payments taxed?

There is often some confusion because under Colorado law severance payments are not considered "wages"; however, under federal law, supported by the March 25, 2014, ruling by the U.S. Supreme Court in United States v. Quality Stores, Inc., the Court unanimously overturned a lower-court decision and held that severance payments made to involuntarily terminated employees are “wages” subject to Federal Insurance Contributions Act (FICA) taxes.  Not surprisingly, the IRS has been fighting for severance payments to be treated as wages for years.  See links to some relevant articles below:

http://www.adp.com/tools-and-resources/adp-research-institute/insights/insight-item-detail.aspx?id=8DC59D62-27E3-41F6-A0B4-62F6963CEC95

http://www.forbes.com/sites/ashleaebeling/2014/03/25/supreme-court-says-fica-tax-due-on-severance-pay/

 






Category: News and Updates

Category List


Tag List

Certifiably Green Denver (1)
Leases (4)
Real Estate Law Firm (3)
Credit Card Data (1)
courts (1)
Lease Negotiations (1)
Business Contracts (1)
Mergers & Acquisitions (5)
Colorado Employment (20)
Non-Solicitiation (1)
Colorado LLC (1)
Data Breach Settlement (1)
Arbitration (2)
Spanish Business Law (9)
cause for termination (1)
St. Anthony, Minnesota (1)
Construction Bond Claims (2)
Colorado Real Estate (11)
CO Ski and Snowboard Gear Recall (1)
Employment Law (1)
Colorado Courts (1)
Snowboard Gear (1)
Denver arbitration (1)
Denver Colorado Business Attorney (9)
Colorado Judicial Institute (1)
CO Attorney Mentoring Program (1)
Colorado Hispanic Bar Association (1)
Helmet Recall (1)
Commercial Property (1)
Non-Solicitation (1)
Non-Competition Agreements (12)
Trade Secrets (6)
Our Courts Colorado (1)
Commercial Real Estate (1)
Non-Disclosure (1)
LLC Law (2)
Colorado Spanish Legal Services (1)
Ethics (1)
Mechanic's Liens (1)
Spanish Legal Services (7)
Data Breach (2)
Co-Ownership Agreement (1)
Denver Sustainable Law Firm (1)
Non-Compete (2)
Colorado Enforcement of Non-Compete (2)
Skiing Gear (1)
Construction Contracts (5)
Community (28)
cyber security (3)
Colorado Lis Pendens (1)
Wrongful Death Settlement (1)
CO Business Non-Solicitation Restrictions (1)
Denver Broncos (1)
Construction (6)
Cherry Creek Chamber of Commerce (1)
Labor (3)
Colorado Construction (1)
Non-Compete, Colorado non-compete restrictions, enforcing non-compete, protecting Colorado business (1)
Alternative Dispute Resolution (5)
Colorado Business (56)
Colorado Wrongful Death (1)
Enforcing Non-Solicitation Agreement (1)
Colorado business disputes (1)
Resolving Business Disputes (1)
Finance Law (2)
Overtime Wages (2)
Real Estate (4)
(31)
Colorado Retail Leasing (1)
Colorado Foundation for Water Education (1)
Colorado at-will employment (1)
Corporate Law (8)
Litigation (15)
Property Surveys (1)
Employment (3)

Archive