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TAX REPORTING

Severance Pay Might Not Be Subject To Social Security & Medicare Taxes

By The BIDaWIZ Team on November 9th, 2012 at 4:00 pm

Two federal appeals courts have reached different conclusions as to whether or not severance pay is subject to payroll taxes. As you might be aware, payroll taxes are paid by both employees and employers and are currently 13.3% for all wages earned up to $110,100. We believe there's a strong case to be made for why severance pay should not be subject to social security and medicare taxes. .
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