Payroll Fact of the Day!
Court rules severance Pay Is Not ‘Wages’ BUT analyst recommend still treating severance as wages until IRS recognizes court ruling.

In United States v. Quality Stores, the Sixth Circuit Court of Appeals ordered a refund of $1 million in overpaid FICA taxes. The court rejected the IRS position, ruling that the downsizing severance payments met the statutory definition of SUB-pay and were not FICA wages. Summary and analysis of the decision is provided by APA’s Tax Counsel.


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