Employers – Begin Withholding FICA from Severance Payments
On March 25, 2014, the Supreme Court unanimously held that severance payments to employees are taxable under FICA. This means that employers who terminate employees and provide severance packages to those employees must withhold FICA taxes. Make sure your HR, payroll and accounting departments adjust their practices accordingly. If you have additional questions, you should contact an experienced business attorney or CPA.
