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Thread: US Court Rules Severance PayNot Subject toEmplyment Tax.....

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    US Court Rules Severance PayNot Subject toEmplyment Tax.....

    WASHINGTON (Reuters) - In a tax decision that could have wide business implications, a U.S. appeals court ruled on Friday that employment taxes should not have been imposed on severance pay in an involuntary layoff.

    The issue - one that has been is dispute for years - could end up before the Supreme Court because there is a split between appeals courts over it, Toro said.

    The 6th Circuit judges admitted their ruling created a conflict. "We acknowledge that this issue of statutory construction is complex and that the correct resolution is far from obvious," said Judge Jane Stranch in the court's opinion.

    "While the Supreme Court may ultimately provide us with the correct resolution ... only Congress can clarify the statutes concerning the imposition of FICA tax," the court said.

    The case is: United States v. Quality Stores Inc, No. 10-1563.....snip~

    U.S. court rules severance pay not subject to employment tax - Yahoo! News

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    Re: US Court Rules Severance PayNot Subject toEmplyment Tax.....

    Quote Originally Posted by MMC View Post
    WASHINGTON (Reuters) - In a tax decision that could have wide business implications, a U.S. appeals court ruled on Friday that employment taxes should not have been imposed on severance pay in an involuntary layoff.

    The issue - one that has been is dispute for years - could end up before the Supreme Court because there is a split between appeals courts over it, Toro said.

    The 6th Circuit judges admitted their ruling created a conflict. "We acknowledge that this issue of statutory construction is complex and that the correct resolution is far from obvious," said Judge Jane Stranch in the court's opinion.

    "While the Supreme Court may ultimately provide us with the correct resolution ... only Congress can clarify the statutes concerning the imposition of FICA tax," the court said.

    The case is: United States v. Quality Stores Inc, No. 10-1563.....snip~

    U.S. court rules severance pay not subject to employment tax - Yahoo! News
    I agree with the ruling...within limits. Golden Parachutes aside, I think severance pay should not be subject to FICA. Ordinary income tax? Absolutely. FICA, no.
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: US Court Rules Severance PayNot Subject toEmplyment Tax.....

    Quote Originally Posted by MaggieD View Post
    I agree with the ruling...within limits. Golden Parachutes aside, I think severance pay should not be subject to FICA. Ordinary income tax? Absolutely. FICA, no.
    At what point is severance pay considered a golden parachute?
    He touched her over her bra and underpants, she says, and guided her hand to touch him over his underwear
    Quote Originally Posted by Lutherf View Post
    We’ll say what? Something like “nothing happened” ... Yeah, we might say something like that.

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    Re: US Court Rules Severance PayNot Subject toEmplyment Tax.....

    Hmmm. I guess I will be able to refile and get a refund if SCOTUS rules the same.
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    Re: US Court Rules Severance PayNot Subject toEmplyment Tax.....

    Quote Originally Posted by Deuce View Post
    At what point is severance pay considered a golden parachute?
    Good question. I'm not sure I know. But, wait a minute! I just had a thought. YES, they should have to pay FICA on it up to the maximum -- which is $100,000 income, thereabouts, I believe. I've changed my mind. Sorry, I do that now and then...I'm really a blonde.
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: US Court Rules Severance PayNot Subject toEmplyment Tax.....

    Quote Originally Posted by MaggieD View Post
    Good question. I'm not sure I know. But, wait a minute! I just had a thought. YES, they should have to pay FICA on it up to the maximum -- which is $100,000 income, thereabouts, I believe. I've changed my mind. Sorry, I do that now and then...I'm really a blonde.
    You can't do that. It violates the equal protection clause.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: US Court Rules Severance PayNot Subject toEmplyment Tax.....

    Quote Originally Posted by apdst View Post
    You can't do that. It violates the equal protection clause.
    Can't do what? My first idea about the Golden Parachutes. Or keep my hair blonde?
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: US Court Rules Severance PayNot Subject toEmplyment Tax.....

    Quote Originally Posted by MaggieD View Post
    Can't do what? My first idea about the Golden Parachutes. Or keep my hair blonde?
    Charge taxes on one group of people, but not another.

    It's why Obama's brilliant idea to put a 50% tax on bonuses trickled all the way down to the gorcery store cashier's Christmas bonus.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: US Court Rules Severance PayNot Subject toEmplyment Tax.....

    Quote Originally Posted by apdst View Post
    Charge taxes on one group of people, but not another.

    It's why Obama's brilliant idea to put a 50% tax on bonuses trickled all the way down to the gorcery store cashier's Christmas bonus.
    Uhh, her suggestion would be that all severance payments be subject to the same FICA tax structure. What groups are being differentiated?
    He touched her over her bra and underpants, she says, and guided her hand to touch him over his underwear
    Quote Originally Posted by Lutherf View Post
    We’ll say what? Something like “nothing happened” ... Yeah, we might say something like that.

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    Re: US Court Rules Severance PayNot Subject toEmplyment Tax.....

    Quote Originally Posted by Deuce View Post
    Uhh, her suggestion would be that all severance payments be subject to the same FICA tax structure. What groups are being differentiated?
    Yu have to apply the law equally. You can't charge FICA tax on some folks and not others. It's called, "equal protection under the law".
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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