August layoff person here in California. My package hit my bank account and it was taxed 40%. Anyone else see a huge amount of taxes taken out too? It's so frustrating to see that much taken out. Let's lay you off and then turn around and take 40%.
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I got married in May, pulled money from my 401k to put a down payment on a house that I had to get a co-signer because they checked my employment status right after I was laid off. So my taxes are going to be a mess next year. We'll see what I get back, if anything due to pulling out $5,000 more than what my severance was. I had hoped for more, wasn't expected 40% taxed. Not sure if it's a California thing or not.
can you claim exempt?
I just read our letter you won’t get the agreement to sign until 12/9. Our last day is technically 12/8. I would doubt seriously they will pay by end of year unless they are trying to wrap all payouts before end of year.
"how long did it take to get your payment? (oct lay off and very nervous it'll take a month for get paid my servance after i sign in dec)"
You'll receive a normal paycheck Dec 8 minus extra withholdings for medical coverage through the end of the year... so roughly double the normal for your medical plan. Once you sign your severance they have to sit on it for 7 days as you have the right to revoke your acceptance. If you sign it this coming Saturday which is when I'd expect to receive the severance agreement you're probably looking at being paid right before Christmas best case.
"I wonder was it taxed at 40% because you’re in Cali?"
Cali state tax is higher than most states so it will be taxed higher than those in most other states. I'd estimate most will see a 20-25% federal tax + 7.65% soc security + state taxes... so a somewhere between 28%-40%. If you live in FL, TN, TX, NV, SD, NH, WA, WY or AK those states have no state income tax so you will be on the lower end of that range.
how long did it take to get your payment? (oct lay off and very nervous it'll take a month for get paid my servance after i sign in dec)
How long did it take for you to receive the severance?
"The policies I voted for are now working against me. How can this be happening to me?"
You weren't taxed, that is what was withheld. You may well receive much of that back when you file your 2023 taxes. What tax you actually pay will be determined by your tax liability as of 12/31/2023. If you received a large severance it may well have pushed you into a higher tax bracket if your income ends up being significantly higher than what it would have been if you continued to work.
But what you cite is exactly the reason that I won't be signing my severance agreement until after the new year so that income doesn't bloat my 2023 income. I'm on the verge of retirement and don't plan to work full time going forward so my tax liability should drop. Wasn't planning to retire this early...planned to work another 2-3 years but my heart doesn't have it me to go through the job search ringer again and not sure it would be fair to an employer knowing I had 1 foot out the door the day I would start.
I wonder was it taxed at 40% because you’re in Cali?
I wasn't expecting that much taken out. It's bad enough being laid off after 20 years but let's also take 40% off the top.
It's taxed like a bonus would be. This is standard practice. That is how mine was taxed during the layoff in early 2021.