What to do if I was laid off this week and now my former place of employment is trying to tax my severance package as a bonus?
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What to do if I was laid off this week and now my former place of employment is trying to tax my severance package as a bonus?
It would tax this money at 42% instead of the normal tax bracket. Can it do this?
Asked on April 23, 2012 under Employment Labor Law, California
Answers:
Hong Shen / Roberts Law Group
Answered 11 years ago | Contributor
Severance package is still considered income and you should pay income taxes. However, it should be taxed at your regular tax rate. You should ask why the 42%. You would eventually get the money back when you file tax return next year.
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