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

attorney-client privilege (2)
Spanish Business Law (9)
Colorado Lis Pendens (1)
Colorado Judicial Institute (1)
Non-Compete (2)
Employment Law (1)
Data Breach Settlement (1)
Enforcing Non-Solicitation Agreement (1)
cause for termination (1)
Denver Business Journal (2)
Colorado LLC (1)
Corporate Law (8)
Colorado Real Estate (11)
Reed Morris (1)
Colorado Construction (1)
Commercial Real Estate (2)
Construction Bond Claims (2)
Denver Business Law (1)
Skiing Gear (1)
Litigation (15)
CO Ski and Snowboard Gear Recall (1)
Spanish Speaking Lawyers Committee (1)
Overtime Wages (2)
Colorado Wrongful Death (1)
Colorado Business (56)
Colorado at-will employment (1)
St. Anthony, Minnesota (1)
Cherry Creek Chamber of Commerce (1)
Research (1)
Colorado Enforcement of Non-Compete (2)
Construction Contracts (5)
CO Business Non-Solicitation Restrictions (1)
Non-Competition Agreements (12)
Denver arbitration (1)
Colorado Hispanic Bar Association (1)
courts (1)
Employment (3)
Ethics (1)
American Bar Association (2)
Co-Ownership Agreement (1)
Certifiably Green Denver (1)
CO Attorney Mentoring Program (1)
Denver Colorado Business Attorney (9)
Construction (6)
Commercial Property (1)
Colorado Foundation for Water Education (1)
Arbitration (2)
Resolving Business Disputes (1)
Non-Solicitiation (1)
Community (29)
Colorado Spanish Legal Services (1)
subcontractor negotiations (2)
Finance Law (2)
Credit Card Data (1)
Colorado Retail Leasing (1)
Mergers & Acquisitions (5)
Property Surveys (1)
Real Estate Law Firm (3)
Leases (4)
Denver Sustainable Law Firm (1)
indemnifications (2)
Panelist (1)
Mechanic's Liens (1)
ABA (1)
(33)
Real Estate (4)
Non-Disclosure (1)
Spanish Legal Services (7)
Business Contracts (1)
Master Services Agreement (2)
Trade Secrets (6)
Colorado attorney mentor (1)
Our Courts Colorado (1)
Alternative Dispute Resolution (5)
Non-Solicitation (1)
Wrongful Death Settlement (1)
Denver Broncos (1)
Colorado business disputes (1)
cyber security (3)
ABA Article (1)
Snowboard Gear (1)
Colorado Courts (1)
Non-Compete, Colorado non-compete restrictions, enforcing non-compete, protecting Colorado business (1)
Data Breach (2)
Labor (3)
Helmet Recall (1)
Lease Negotiations (1)
Colorado Employment (20)
Denver Real Estate (1)
LLC Law (2)

Archive