Topic: FICA

Written Any Severance Checks Lately? You May Be Entitled to a Tax Refund

Employers in Kentucky, Michigan, Ohio, and Tennessee who have withheld FICA tax on severance payments made in connection with layoffs or plant closings might be getting some money back from the IRS. Law firm McDermott Will & Emery: “The U.S. Court of Appeals for the Sixth Circuit recently held that certain dismissal payments were Supplemental… Read more »

When Is a Tip Not a Tip? When the IRS Says So…

Here’s a tip: restaurants that tack a fixed charge on certain bills must begin withholding additional taxes on those amounts. Known as “auto gratuities,” compulsory service charges paid by diners should be considered employer-paid wages—not tips—and treated accordingly for tax purposes. Law firm Pillsbury: “Employers are required to collect income tax, employee social security tax… Read more »