FAQ Interest, Dividents, Other Types of Income: Employee Reimbursements, Form W-2, Wage Inquiries

Employee Reimbursements, Form W-2, Wage Inquiries

This is archived information that pertains only to the 2002 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Is severance pay taxable?

Amounts you receive as severance pay are taxable. A lump-sum payment for cancellation of your employment contract is income in the tax year you receive it and must be reported with your other salaries and wages. For additional information on wages, salaries, and other earnings, refer to Publication 17 (PDF), Your Federal Income Tax, in Chapter 6, or Tax Topic 401, Wages and Salaries.

References:

Publication 17 (PDF), Your Federal Income Tax
Tax Topic 401, Wages and Salaries

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