6th Circuit: Severance Pay Is Not Subject to Employment Taxes

The U.S. Court of Appeals for the Sixth Circuit on Friday disagreed with the Federal Circuit (CSX Corp. v. United States, 518 F.3d 1328 (Fed. Cir. 2008)) and held that severance pay to laid of workers is not subject to Social Security and Midicare taxes.  In re Quality Stores, No. 10-1563 (6th Cir. Sept. 7, 2012).

• Chicago Tribune
• New York Times
• Tax Appellate Blog

(Hat Tip: Bob Kamman.)