Severance pay withholding taxes
My severance pay check's withholding taxes was equivalent to 40% of gross pay. I've searched high and low on internet to get explanation, table, or reasons why it is taxed so high. Can you explain?
Thank you.
Answers (1)
withholding on severance
because the gross is taxed as if it were all earned in a single pay period (two weeks or 1/2 month), even though it might be equivalent to a month or more's pay.
the solution would have been to change your withholding form before the check was issued. (that would affect only the income tax withholding though, not the payroll taxes.) you really can't do that retroactively.
good luck
janet m. koehn
posted by Janet M. Koehn | Mar 14, 2003 4:41 PM [EST]
because the gross is taxed as if it were all earned in a single pay period (two weeks or 1/2 month), even though it might be equivalent to a month or more's pay.
the solution would have been to change your withholding form before the check was issued. (that would affect only the income tax withholding though, not the payroll taxes.) you really can't do that retroactively.
good luck
janet m. koehn
posted by Janet M. Koehn | Mar 14, 2003 4:41 PM [EST]
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