Anyone knows how the severance would be taxed once one is laid off with big fat severance package
I don't think it'd be taxed as salary so it be like bonus or capital gains...
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Thanks a lot. This is valuable advice. Do you mean people change addresses at the time package will be given? Or even before layoffs announced?
Will be treated like a huge paycheck.
Withholding will be commensurate.
If you are being let go switch you address to FL, TX or NV so you will not pay state taxes on your package. Switch before layoffs if you can!
depends on eoy form sent to you. if it is W2, it is income. not cap gain or div.
No, it is considered salary. You have federal and state income tax withholdings, as well as social security / medicare.