is the final severance pay out also taxable?
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When I got laid off 2 years ago the severance package was 4 weeks for the first year of service plus 1 week for year of service for every year after that with a max cap of 26 weeks. They paid for a month of COBRA. I had 3 or 4 weeks of accrued vacation so basically got 30 weeks of pay.
Unfortunately I had a stock grant the previous year that wasn't vested so I got zilch out of that.
What about benefits, like health insurance, etc? Were any 401k contributions you make (with company matching) deposited into that account?
The lump sum doesn't affect the rate, at least in the USA. It's the same amount of tax on those dollars whether it was earned in a week or a year. When payment is received can affect quarterly estimated taxes but since this tax is being withdrawn at the same time as the income is paid there's no issue here.
I worked 1 year, Got 1 months pay. 120 K per annum, severance was 10 k!
Sorry to hear the layoffs. What was the serverance payout
Yes. Mine was taxed at 21.8% federal.
It's income, why wouldn't it be?
Not only taxable, but at a high rate because the payout will be in a lump sum.