The decade-long debate over whether or not severance paid to certain employees is considered wages for Federal Income Contributions Act (“FICA”) tax purposes is over.  On March 25, 2014, the US Supreme Court ruled in favor of the IRS in United States v. Quality Stores, Inc., deciding that severance payments employers made to involuntarily laid-off employees are “wages” and are taxable under FICA.

This latest TMS article on the Quality Stores case was featured in the Tax News section of Law360.com.  Please click here to read and download the article on Law360.com (subscription required) or click here to download a copy from TMS.