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Supreme Court Decision on Severance Pay Looms; Key Deadline Approaches

Jan

31

January 31 , 2014 | Posted by Brian Stautberg |

Supreme Court Decision on Severance Pay Looms; Key Deadline Approaches

A key date for taxpayers that paid severance to employees in 2010 is rapidly approaching. April 15 is the deadline for filing a protective refund claim on Form 941-X. The Supreme Court is expected to soon resolve a conflict over whether severance payments that are made as part of a reduction in workforce are wages subject to FICA tax, with a decision expected by late spring or early summer. Companies that previously filed protective claims that were denied should use Form 907 to ask the IRS to stop egg-timer on the two-year limitation period for seeking a refund. The IRS has confirmed that it will approve these requests.