Discussion:Taxability of Severance Pay
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Discussion Forum Index --> Tax Questions --> Taxability of Severance Pay
| 23 March 2007 | |
| Question - TP received an award for damages of being wrongly terminated, the company is labeling as "severance pay." Any ideas on this being considered taxable or not? | |
| 23 March 2007 | |
| severance pay is income and is taxable...I would suggest looking at the fine print of the award...however under the circumstances stated it looks taxable to me taxea | |
| 3 January 2008 | |
| Would this be subject to self employment tax???
I have a customer that along with several others had to sue their former employer over promised severance pay. 7 years later they won the court case and the checks were distributed from the attorney just before years end. The statement from the attorney states that they will not recieve a 1099 but must included money as income and I realize that but I am wondering about self employment taxes. Before they were all w-2 employees | |
Death&Taxes (talk|edits) said: | 3 January 2008 |
| They are not in a trade or business of being disgruntled employees. No SE Tax. | |
| 3 January 2008 | |
| D&T - by that measure I have had employees who should have gotten a 1099. | |
| 3 January 2008 | |
| Thanks, found the answer right after I posted it here.
Thanks for the quick response | |
| 3 January 2008 | |
| Seems to me as though it would be subject to FICA taxes since payment resulted from employment. | |
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