Why make it more painful for impacted folks who will receive 6 months pay but at the end of a tax year which only helps the taxes/government
Not everyone is earning too high. There are people with single income and single filing status. No secondary job, healthcare support
Does anyone know what will Cisco get out of it?
Can the severance date be deferred until Jan 2021 so there isn't a false hike in income bracket?
Isn't there a better way out of both for employee and for Cisco?
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So, do we get a choice of getting the 6-month severance in CY 2020or CY2021, or is pre-determined to be 2021?
I'm not sure I understand the question, but I'll try to answer as best I can.
The only choice you have is whether or not you accept one of the 3 options that were given to you when you were notified that your role is "at risk". Since I wasn't notified, and Cisco isn't being 100% transparent, I don't have all the details, but what I do understand from what I've been told by those who were plus what was provided in the PowerPoint slides when the CEP/LR was announced is this.
If you chose the Optional Choice program, your employment ends on Nov 23rd, and all the payments due to you will be within a week of the expiration date from the agreement you'll be signing not to sue Cisco. I've heard they're optionally allowing people to take an early exit on Oct 30. In either case, your severance is in CY20.
If you chose the Step Out leave of absence, when you find work or the agreed upon end of the LOA period ends, then you receive a smaller severance package. That would be in CY21 because the LOA is longer than the 3 months left in CY20.
If you chose to Stay Put & Look, and are unable to find a new role, then your employment ends on Jan 4, '21, and your pay will come a week later, so that will be CY21.
As to whether or not it's best to wait and take the smaller package in CY21 or take the larger one in CY20 on top of 4/5 of a year's already earned pay, that's up to you to figure out and I recommend you talk w/ a financial planner or a tax advisor.
When I was LR'd back in '16, I receive all my severance in Sept on top of 3/4 of the year's pay, so it pushed me up into the next tax bracket. Luckily Cisco withheld so much of it that I still got a huge tax return that tax year. I don't recall, but I think my effective tax percentage paid was only 1% higher than the year before or after. And having the larger severance which went into my investments was worth more than that 1%. I was lucky because the job market wasn't that bad in the fall of '16. I certainly didn't have this pandemic to deal with.
So, do we get a choice of getting the 6-month severance in CY 2020or CY2021, or is pre-determined to be 2021?
If you think that tax rises will be only for those above $400K, you are beyond naive. The key to raising tax is to make the net BROAD. It’s much, much easier to get $1,000 from 10,000,000 income earners above 50K than it is to try and extract $10,000,000 from 1,000 billionaires.
In fact, within 4 years you’ll have a VAT.
I’m not making over $400K so I’m not worried.
If it hits in 2020 or 2021 you’re still paying the same amount of taxes. If it hits in 2020 and you pay more taxes, in 2021 you won’t have that income and you’ll pay less taxes. It all evens out in the wash.
Actually people in CA and other high income tax states won't see their taxes go up much or may be none at all, since along with the tax hike, Biden admin will also reinstate state and local tax deduction. Depending on the tax bracket, lot of people in these states (myself included) didn't see their taxes go down after the disastorous tax cuts of 2018.
It is an advantage to anyone losing their healthcare to have the payout in 2020. ACA (Obamacare) subsidiary is based on forecasted income and being paid in 2020 will help keep earned income lower in 2021 for those who apply for health insurance on the marketplace exchange.
Do you know about this in California. having forecasted 0 income based on no job in Jan put one in Medi-Cal as part of covercedca program, but the doctor set is not good. For private insurance looks like one needs to have some salary and lower the salary the premiums are very low. should forecast be then previous lsaary only.
It is an advantage to anyone losing their healthcare to have the payout in 2020. ACA (Obamacare) subsidiary is based on forecasted income and being paid in 2020 will help keep earned income lower in 2021 for those who apply for health insurance on the marketplace exchange.
As mentioned by another poster, if Biden wins the election taxes will be going up in 2021 - likely retroactively to January 1st if there is a sweep of the house, senate and executive branch.
Cisco wants to shaft you by any means possible. Didn't you see how Fran was laughing while at the same announcing the upcoming LR/ER during the Check-in?
Cisco is following standard process.
I would say they are being more generous than they have to be - blame your taxes on the government you have elected.
If Biden gets elected taxes are going up. They will try to raise taxes as soon as possible in 2021, and probably make them retroactive to Jan 2021. So Cisco is actually saving you money.....
who gets access to deffered compensation plan? DCP?
Us "walking dead" are liabilities on their books, which they'd prefer to have off of them ASAP.