Hello and thanks for trusting me to help you today. I am a tax
adviser with over 20 years of experience.
Severance pay is taxed for withholding
at either your regular withholding allowances
or at the higher rate ( Supplemental rate, like Bonuses)of 25% flat rate withholding. This rate can be used for supplemental wages paid to an employee that do not exceed $1,000,000 during the calendar year.
Your severance pay will be taxed at your regular rate of tax. It is added to your income
, your filing
status and total income will determine the rate.
If you are single,
For earnings between $0.00 and $10,000, you'll pay 2.59%
For earnings between $10,000.00 and $25,000, you'll pay 2.88% plus $259.00
For earnings between $25,000.00 and $50,000, you'll pay 3.36% plus $691.00
For earnings between $50,000.00 and $150,000, you'll pay 4.24% plus $1,531.00
For earnings over $150,000.00, you'll pay 4.54% plus $5,771.00
Married Filing Joint:
For earnings between $0.00 and $20,000, you'll pay 2.59%
For earnings between $20,000.00 and $50,000, you'll pay 2.88% plus $518.00
For earnings between $50,000.00 and $100,000, you'll pay 3.36% plus $1,382.00
For earnings between $100,000.00 and $300,000, you'll pay 4.24% plus $3,062.00
For earnings over $300,000.00, you'll pay 4.54% plus $11,542.00
the rate of tax depends on the same as the state
but can be higher.