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Showing 4 posts in Tax.

Hinshaw E-alert on a New Employer Tax Credit for Paid FMLA

The Hinshaw employment team recently published an e-alert on a topic that should also be of interest to our blog readers. The alert describes a provision in the new tax law that provides a tax credit for employers who offer paid FMLA leave to eligible employees, along with a description of eligibility requirements. You can read the alert on the Hinshaw website.

IRS Releases New Tables for Employee Income Tax Withholding

On January 11, 2018, the IRS issued its new withholding tables to assist employers with processing payrolls and withholding federal income tax under the new Tax Reform Act signed into law late last year (the “Act”).  IRS Notice 1036 establishes the percentage method tables for 2018 income tax withholding with respect to employee wages.  More ›

Employee’s Settlement Proceeds from age Discrimination Dispute Subject to FICA Tax Withholding

After the financial services employee was terminated, he filed a charge with the Equal Employment Opportunity Commission, claiming that his employer discriminated against him in violation of the Age Discrimination in Employment Act and New York state law. The parties ultimately resolved the dispute for $250,000. When making the payment, the employer withheld taxes pursuant to the Federal Insurance Contribution Act (FICA). The employee claimed that this was improper and filed suit, seeking a refund of the $4,218 withholding. More ›

Sixth Circuit Affirms: Certain Severance Payments are Exempt from FICA Tax

In United States v. Quality Stores, Inc., No. 10-1563 (Sept. 7, 2012), an employer operating a chain of retail stores closed a number of facilities prior to entering bankruptcy proceedings. As part of this reduction in force, the employer provided certain severance benefits to terminated employees. The employer treated the severance benefits as income and reported them as wages on Forms W-2, with Federal Insurance Contributions Act (FICA) taxes withheld. After remitting the taxes to the Internal Revenue Service (IRS), the employer filed a claim for refund to recover more than $1 million in FICA taxes, arguing that the severance payments were not properly treated as "wages" for FICA tax purposes. More ›

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