Social Security Questions? Ask a Social Security Expert
Hi from Just Answer. I'm PDtax, and will assist.
Severence pay is subject to FICA, which both you and your employer have to pay. In some cases, it could help you, s it might bump up your social security benefits. In some, it may have no effect. We don't get to choose.
It also means that your wages will be boosted for unemployment benefits. Any other kind of settlement would bnot be treated as wages, and you would likely lose out on some unemployment benefits.
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