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U.S. v. Quality Stores, Inc. (US 2014)

Articles Discussing Case:

Legal Alert: Supreme Court Decides Severance Not Exempt from FICA

FordHarrison LLP • April 01, 2014
Executive Summary: On March 25, 2014, the United States Supreme Court unanimously held that certain severance payments (described as "supplemental unemployment compensation benefits" or "SUBs") constituted taxable wages for purposes of FICA. See United States v. Quality Stores, Inc. No. 12-1408 (2014). The Sixth Circuit had held that the payments were not wages subject to FICA, in a decision from which the IRS appealed. See In re Quality Stores, Inc., 693 F. 3d 605 (6th Cir. 2012).

Supreme Court: Severance Payments Are Wages Subject To FICA Taxes

Fisher Phillips • March 27, 2014
On March 25, 2014 the U.S. Supreme Court unanimously held that a certain type of severance payment known as supplemental unemployment compensation constituted “wages” subject to Federal Insurance Contributions Act (FICA) payroll taxes. The Court’s decision resolves a split of authority between U.S. Courts of Appeals, and affirms the Court’s broad interpretation of “wages” for purposes of both FICA and income tax withholding requirements. United States v. Quality Stores, Inc.

Tax Alert: US Supreme Court Rules Severance Pay Subject to FICA Taxes

Nexsen Pruet • March 27, 2014
This week, the U.S. Supreme Court confirmed that severance pay is subject to FICA tax.

High Court Rules Some Severance Payments Are Taxable

Ogletree Deakins • March 26, 2014
This morning, the Supreme Court of the United States held that severance payments are taxable under the Federal Insurance Contributions Act (FICA) when made to employees whose employment is involuntarily terminated. The Court reasoned that FICA’s definition of wages encompasses severance payments and that the severance at issue in this case, which was not linked to the receipt of state unemployment benefits, was not exempt from FICA tax. United States v. Quality Stores, Inc., No. 12-1408, Supreme Court of the United States (March 25, 2014).

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