United States: IRS Announces That It Will No Longer Refund FICA Taxes On Severance Payments
The IRS recently announced that severance payments are taxable wages under FICA, and thus employers who seek tax refunds on those payments will be denied. The IRS’s position reflects the United States Supreme Court’s ruling in United States v. Quality Stores, Inc., issued in March of last year.
Quality Stores, Inc. entered into bankruptcy proceedings in 2001 and terminated thousands of employees. The company offered the employees a variety of severance plans depending on the […]