Tax Information With A Mother's Touch
Published by Eva Rosenberg, MBA, EA
Volume 6, Issue 269 July 30, 2004
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Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA Volume 6, Issue 269 July 30, 2004 |
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 » From: Somewhere out there Dear TaxMama: Have you heard anything definite on the possible refund of FICA tax that was paid on severance payments? I recall there was a court case with CSX railroad winding through the system, but I never heard how it turned out. Should I file a refund request to "save my spot", in case it goes well? I received a large severance payment in 2002, so I'd need to do something in the next year or so ... Thanks, Greg <Tax Pro Replies> Steve Odem shares his wisdom: Subject: FICA tax that was paid on severance payments Yes, but it doesn't directly benefit the employee of CSX, and it's a fairly narrow case. CSX laid off a lot of employees, with severance pay. CSX withheld and paid FIT and FICA under protest, then filed for refund of the FICA (Court of Claims as I recall). IRS resisted but lost on appeal. The important element was that the most of the severance was earned by the employees over a period of years. As such, the court held that portion was exempt from FICA. In so far as CSX employees had their portion withheld, they should receive a refund BUT should contact CSX about the details of it. If CSX is handling it direct, CSX should receive the refund and distribute it to the former employees. If not, the employees need to write Social Security.  |
 
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| Library of Congress - ISSN 1532-0790 Copyright © 2000-2007 - Eva Rosenberg |
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