Does anyone know how the severance package will be taxed and if they will withhold Railroad retirement (T1 & T2)? Also trying to determine if they will let us delay receipt of the severance until 2019. Many of us already maxed out on T1 & T2 prior to loosing our jobs. My thinking is that if I take the severance package this year (2018) that they will not take Railroad retirement, but it will put me in a very high tax bracket. If I wait until 2019 to get the payment my taxes will be lower, but I will possibly end up paying T1 & T2. Just a quick back of the envelope analysis tells me that the next tax bracket up will cost me an additional 2% in federal tax and if I wait until 2019, the RRT withholdings will be about 13%. Have any of you ran these scenarios by a financial advisor?
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if you are maxed out on tier 1 &2 you can recover them through your tax return..tier 1 on your tax filing a form 843 for the tier2
Only Tier One is taken out, not Tier 2.....
Taxes, incl RRT are withheld. You have 45 days to sign the letter. Then there is a mandatory 7 day hold period. Then they have up to 90 days to pay. That all being said, I got mine on like day 10 after submitting. They are paying fast cause they want as much as possible to hit in 2018. So if the calendar works in your favor, hold off til day 45 and pray for some delay!
Has anybody received their’s yet? I heard they weren’t going to payout until January and I’m hoping that is wrong. I turned mine in almost 2 weeks ago and haven’t heard or received anything.
Yes to RR taxes being taken out, someone mentioned in earlier post it was taken out of theres. I believe you only have 45 days to sign off on the severance. That being said if you were in the latest round of layoffs you could potentially hold off until the 45th day to get you to the end of December and might could get you some wiggle room to get paid out early 2019. I would think HR probably have to have sometime to process after they receive your documents . Just a thought for how you could possibly make it work for you.