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» From: Auburn Hills, MI Dear TaxMama: My husband received a severance check in 2001. Social Security taxes were not taken out. Our financial planner is checking into the issue, but thought you may know. Do we have to pay SS on the money?? Thanks! Danielle Dear Danielle, That is odd, isn't it. Please check with the company to see if the wages on that check were already included in his W-2. If they were, don't worry about it. If they weren't, ask his former employer how they characterized the payment on their books. Or, did you get a 1099 for that income? If you did, that's certainly wrong and you can fix that on your own return. Follow the instructions here. Good luck! Best wishes Eva Rosenberg Your TaxMama He received a W-2 for the check. But, he did not have any other income in 2001, so this was the only w-2. He worked at this job for 3 years (professional sport) and then did not play the 4th year (chose to receive his severance check). I just talked to a lady on the IRS "hotline" (after being transferred to about 8 people who couldn't answer the question) and she thinks we should have to pay social security tax for it, then fill out a form (4137), and then the amount we pay will be added to our social security total.and then they will ask the employer to match and pay the same amount. This just sounds a little weird? If they didn't take the money out, why is it our responsibility? Thanks! Danielle Hi Danielle, If he received a W-2, don't worry about paying the Social Security. That's the employer's responsibility. The only thing is, you may want to contact SS Administration and get a print out of your husband's account. Make sure that he shows Social Security wages for each year he worked. (or at least for 10 years) You want to make sure that's covered so he can collect SS when he's ready. If there are any years missing, this is a good time to follow up with employers. Eva P.S. She finally verified with the company controller that the check was correct and they owe no SS taxes.  |
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