Can you collect unemployment together with severance?
Is there a way to receive severance in installments to minimize taxes?
I'm convinced the next round of layoffs will include my name so I'm trying to get better informed about some issues. The whole severance/unemployment seems to depend on the state and the company. My state allows it but I'm not sure if the company does. Or I might have the whole thing wrong, hence the question.
https://www.twc.texas.gov/news/efte/release_waiver_agreements.html
The “ enhanced severance “ is not considered severance by the TWC. This is helpful to know.
Incentive money, i.e., money paid to secure an employee's agreement not to file claims or lawsuits, is not regarded as severance pay for unemployment claim purposes and will not affect unemployment benefits if it is paid to obtain a release or waiver of liability from the departing employee with regard to the Civil Rights Act of 1991, or to settle a claim or lawsuit that has already been filed, or in connection with a written contract that was negotiated between the employer and employee prior to the date of the work separation.
I'm in the same boat as the originator....laid off in Oklahoma........so far, I haven't received any unemployment benefits. I answered honestly that I'd be receiving a severance and my claim has been identified for review. I'm supposed to file my weekly claim each week, but it keeps getting locked due to my "Yes" answer to receiving severance. I haven't actually gotten my severance pay yet, so I've had to go to the local office each week to have my account 'unlocked' so I can report no income each week. Not sure why I'm having this issue since COP has continually laid-off people & paid severance for the the majority of the last 6 years or so. Everyone else in the past has been able to draw their unemployment.
I was layed off (in Texas) and received the standard company severance package and was also able to collect unemployment as long as I was looking for a job (with a limited number of months... not sure how it works now with the free money from the pandemic).
Technically, favored Managers at SGL 19 and above have the option of deferred compensation with a wide variety of investment options through Fidelity. Much broader options than we have in the lower grades for our 401Ks. They’re covered and have much more to gain. But we can least afford the burden of a high one year tax bill. No one ever said life was fair.
A flat tax code with no allowable deductions other than a standard deduction for ALL taxpayers would eliminate the need for this discussion. Flat taxes would ensure everyone pays their ”fair” share. The flat rate could be redetermined each year to balance the budget and service the debt. Let’s see how progressive people are when it’s their own money. Problem solved.
Technically, the best day to leave the company is January 1st. Favored managers have used that date in the past as well as scheduled their obscene payoff over multiple years to minimize the tax burden.
This last round was the most tax-friendly yet because it happened early in the year. The September-October layoffs are the worst because there's not enough time to delay the paperwork and push payment into the following year, and you've accumulated a regular salary and VCIP for three quarters of the year. Also, don't forget to add in any automatically-vested RSUs.
It's ironic the year you get laid off will be the year you make the most money, and unfortunately, pay the most tax.
Yes to Q1. No to Q2. But if you get laid off later in the year, you can delay signing the severance paperwork which might force the payment into 2022. Biden’s tax increases will likely take effect in 2022 so that strategy may not lower taxes after all. The only way to truly lower your tax burden is to vote out the current administration.