About this BlogWelcome to the Snell & Wilmer Benefits Blog. We will be posting about current employee benefits and executive compensation topics and issues. We invite you to contact the authors with your thoughts or questions.
The Supreme Court recently ruled in U.S. v. Quality Stores that severance paid to employees is considered wages for FICA purposes. Before the Court’s decision, there was little doubt that employer-provided severance was wages for income tax purposes, but lower court cases were a mixed bag about whether severance was wages for FICA tax purposes. Indeed, the Sixth Circuit in Quality Stores, held that the severance payments made by Quality Stores were not wages for FICA tax purposes because the payments fell within the statutory exclusion for Supplemental Unemployment Benefit (“SUB”) payments for FICA tax purposes. The Supreme Court upheld the IRS’ position and disagreed with the Sixth Circuit’s analysis. Read More ›
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