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Total Articles: 7

FICA Refund Claim Guidance Issued by IRS

The IRS has issued Rev. Proc. 2017-28, clarifying the procedure by which an employer may request an employee's consent to seek a refund of overwithheld FICA taxes on the employee's behalf, beginning June 5, 2017. The Rev. Proc. also clarifies the rules regarding the required substance of the consents employees provide to requesting employers.

Legal Alert: Supreme Court Decides Severance Not Exempt from FICA

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

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

This week, the U.S. Supreme Court confirmed that severance pay is subject to FICA tax.

High Court Rules Some Severance Payments Are Taxable

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).

Supreme Court Justices Consider Taxability of Certain Severance Pay During Quality Stores Oral Arguments

Yesterday the Supreme Court of the United States heard oral arguments in United States v. Quality Stores, Inc., a case on appeal from the Sixth Circuit Court of Appeals. A circuit court split had spurred the Court to hear the case to decide whether certain severance payments made to employees whose employment is involuntarily terminated are taxable under the Federal Insurance Contributions Act (FICA).

Legal Alert: The Windsor FICA Fix

Executive Summary: As promised, the Internal Revenue Service has prescribed special procedures that employers may use in order to retroactively correct FICA withholding and payment following the Supreme Court's decision earlier this year in United States v. Windsor, and last month's Revenue Ruling 2013-17 (the "Ruling"), under which same-sex couples are treated as married for all federal tax purposes if they were legally married, regardless of residence. For background, see our previous Legal Alert: IRS Answers Residence Question for Same Sex Spouses, at http://www.fordharrison.com/9568, and the article linked therein.
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