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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10122
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Is vaction time that was withheld until retirement taxed

Customer Question

is vaction time that was withheld until retirement taxed
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi.

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It is only taxed when paid out in the final pay-check.

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If they never paid it, it's not taxed ... The IRS rule is that you must have constructive receipt.

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When it is paid, although there are laws that state that you can STOP this withholding agreement, IRS tells them that they have to withhold (IF the amount is stated separately ON the pay-stub OR paid in a separate check as SUPPLEMENTAL wages).

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You can read about that here:

http://www.irs.gov/pub/irs-pdf/p15.pdf

(bottom of page 18)

...

Lane

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... Let me know if you have questions

If this HAS helped, and you don't have questions, I'd appreciate a positive rating (by clicking the stars or smiley faces on your screen) ... that's how we're credited for the work here)

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