In the months leading up to the deal’s closing, many longtime Citrix employees left the company, many reportedly from layoffs. Sources close to the company expect that more layoffs will follow.
https://www.channelfutures.com/mergers-and-acquisitions/citrix-joins-tibco-in-newly-formed-cloud-software-group
It's income, just like a large paycheck. It's not capital gains or anything. Taxes are deducted as normal on a regular paycheck.
The remainder is paid in a lump sum as per company policy, just to be clear. It's not a law or anything like that. Given that the 22% bracket starts at $40K for single filers, you're not going to get anything back - and the 24% bracket starts at $86K, so you might even owe more money on your tax return. And of course you might live in a state with an income tax.
Married filing jointly, it's a little better: the 22% bracket goes all the way to $172K, so most people should have some room. Still have to watch out for state taxes, though. The big thing is that, depending on where your income lands, you could get phased out of certain tax credits if you get a few months salary in one lump sum.
There's no nice way around it -- it's a pain no matter what, and you're getting less money in your pocket than you think. There's always collecting unemployment (taxable!)
The U.S. IRS requires employers to deduct a standard 22% in federal taxes. The remainder is always paid in a lump sum. That said, you may get back some of that pre-paid tax when you complete your tax return in April the following year.
Makes sense, I wasn't aware there were different dates by when the letter needed to be signed.
I only recently found out that different people had different dates by which they had to sign. Mine said I had until 12/1 and if I didn't sign by then, I wouldn't get severence at all. I then confirmed that date with HR via email. I found out someone else had until 12/28 to sign. Perhaps I wasn't high enough up in the hierarchy to get until later in December to sign.
Not sure why you weren't able to sign the paperwork until late in December. I was let go 11/15 and signed my paperwork on 12/30 to make sure the severance was deposited in January and avoid the tax hit in 2021.
I got laid of in November last year and the only option they gave me was to take severamce as a lump sum in December. It absolutely had sizeable tax implications in that since it just barely changed my tax bracket, I ended up paying so much in taxes for 2021 that it ate up a considerable chunk of my severance. I had until December 1st to sign the paperwork, so there was no way I could play with the paperwork submission date to delay the payout until a 2022 payroll cycle.
They used to pay out severance over time for most people, unless it's for a short duration. PE would likely do the same and earn $$ on the cash or reduce their borrowing costs
Severance question.... is it always paid in a lump sum, or is there an option to spread it out over months? Obviously if you're getting a month's pay, it doesn't matter, but getting for example six months' pay in one shot has a lot of tax implications. Just wondering what options exist.
Confirmed this morning. The 17th. Is when the magic starts. Most non-essential roles will be eliminated. Those remaining employees will be placed on a performance plan of sorts including low level managers.
Yes, this is why one can't expect 1000 people to be fired in one day. HR would be overwhelmed.
HR is trying to process employee terminations as soon as possible. Please be patient, there are few of us left to do the required work to prepare each employee package