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former9thward

(33,424 posts)

10. This was a very technical case.

Tue Mar 25, 2014, 10:44 AM

Mar 2014

The 6th U.S. Circuit Court of Appeals ruled that the Quality Stores severance payments to former employees were not wages, and therefore were not taxable under FICA.

One part of the tax code defines wages as "all remuneration for employment." So by that standard severance would be taxable. But in a different section of the code, "supplemental unemployment benefits" are exempted from income taxes. Quality Stores which is bankrupt argued that its severance payments are exempt from FICA taxes according to the "SUB payments" definition. The Supreme Court said it was wages not supplemental unemployment benefits and therefore taxable.

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Great. Kick the people getting laid off: SCOTUS Rules Severance Payments Are Taxable [View all] kpete Mar 2014 OP

Does it also apply to Golden Parachutes? el_bryanto Mar 2014 #1

Anything under 250k should not be taxed seveneyes Mar 2014 #2

Agreed! Xyzse Mar 2014 #7

Maybe anything under $2000, but $250,000 is insane... Demo_Chris Mar 2014 #11

We are talking about severance pay only seveneyes Mar 2014 #20

If someone is handing you a check for $250K, YOU ARE 1% RICH. nt Demo_Chris Mar 2014 #21

Not after paying the bills and no more money coming in seveneyes Mar 2014 #23

You must be very successful. Well done. nt Demo_Chris Mar 2014 #24

I was laid off twice from large companies during my career... MANative Mar 2014 #3

I was laid off in 2010 here in Georgia, received $10,000 RebelOne Mar 2014 #19

Why the heck wouldn't they be? It's income. cthulu2016 Mar 2014 #4

Indeed. n/t PoliticAverse Mar 2014 #15

8-0 decision (with Kagan recused) onenote Mar 2014 #5

SCOTUS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!111111111111 bigwillq Mar 2014 #17

Why is this a surprise? theboss Mar 2014 #6

Unemployment benefits are taxed exboyfil Mar 2014 #8

I got a couple weeks of unemployement 5 years ago tammywammy Mar 2014 #14

Why wouldn't they be taxed? vi5 Mar 2014 #9

This was a very technical case. former9thward Mar 2014 #10

That makes sense. n/t tammywammy Mar 2014 #13

So that SCOTUS ruled that income is subject to income tax? Orrex Mar 2014 #12

This is misleading. The case involved Social Security and Medicare Taxes. PoliticAverse Mar 2014 #16

Why create another tax loophole Token Republican Mar 2014 #18

Sad, the SCOTUS is becoming nothing more than a rich man's ATM. Rex Mar 2014 #22