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This is ***** *****. I was wondering how severance pay is…

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Hi this is *****...

Hi this is ***** *****. I was wondering how severance pay is taxed in California. How much do I get paid out if the gross severance amount is $66000

Accountant's Assistant: Thanks. Can you give me any more details about your issue?

My employment will get terminated and the employer offers me a one time package of $66000

Submitted: 2 years ago.Category: Tax
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2/29/2016
Tax Professional: Barbara, Enrolled Agent replied 2 years ago
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 5,996
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Severance pay is subject to federal and CA tax.

The standard withholding rate for federal taxes on severance pay is 25 percent. The employer may choose to use the aggregate method. Using the aggregate method, the employer would add the supplemental wages to regular wages and calculate the total amount as regular wages.

The standard withholding rate for California state taxes is 6 percent.

Please let me know if you require further information or clarification.

Thank you and best regards,

Barb

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Tax Professional: Barbara, Enrolled Agent replied 2 years ago

Just following up with you to see if you have any other questions or concerns. If so, please come back to me here, and I will be happy to assist you.

Best regards,

Barb

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