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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15037
Experience:  15years with H & R Block. Divisional leader, Instructor
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For several years I have lived in TN (no state income tax)

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For several years I have lived in TN (no state income tax) and worked in KY. I always filed a form 740 NP with KY to pay taxes due on income earned in KY. In July 2010 I lost my KY job but was given six months of severance pay which was paid bi-weekly for the balance of the year. The company I worked for is headquartered in WI and the severance pay checks were issued from an office in CT. Am I required to treat this severance pay as KY earnings? KY state and local income tax was withheld on the severance pay checks.
Submitted: 6 years ago.
Category: Tax
Expert:  Robin D. replied 6 years ago.

Robin D :

Hello and thank you for using Just Answer

Robin D :

Severance pay is taxable income, and it can be paid out in regular payments like a paycheck, but most employers pay in a lump sum. KY source income is taxable to KY an dthe severance pay was based on earnings while working in KY.

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