Tax Treatment of Certain Severance Payments: Sixth Circuit Ruling Creates a Circuit Split on Whether Payments of Supplemental Unemployment Benefits Made Pursuant to a Downsizing Constitute “Wages” for Purposes of FICA

Sullivan & Cromwell LLP - September 7, 2012

Today the Sixth Circuit Court of Appeals issued an important decision related to the treatment of certain severance payments for purposes of the Federal Insurance Contributions Act. The attached memorandum discusses the Court’s ruling.