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