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Showing 3 posts in United States v. Quality Stores.

Severance Payments are Wages Subject to FICA Taxes

Posted In FICA, Hiring and Firing, Litigation, severance pay, United States v. Quality Stores

On March 24, 2014, the U.S. Supreme Court held in United States v. Quality Stores, Inc., 572 U.S. ____ (2014), No. 12-1408, that severance payments made to employees terminated in connection with a company’s Chapter 11 bankruptcy plan are taxable wages under the Federal Insurance Contributions Act (FICA). The ruling resolves a split among federal circuits and affects all employers who provide severance pay. More >

Supreme Court Will Hear Quality Stores Case

Posted In Chapter 11 Bankruptcy, Employee Benefits, Employment Law, FICA, tax refund, United States v. Quality Stores

On October 1, 2013, the Supreme Court of the United States agreed to hear United States v. Quality Stores, Inc. The case has been previously discussed on our blog. In 2001, Quality Stores entered bankruptcy and closed all of it doors to nearly three-hundred stores. The store challenged a requirement to pay FICA (Federal Insurance Contribution Act) taxes on the severance that it had paid its workers. FICA taxes help finance federal retirement and health care benefits. More >

Employers’ deadline to file protective claim for 2009 FICA taxes is April 15, 2013

On September 7, 2012, the Sixth Circuit of Appeals (which encompasses Michigan, Kentucky, Ohio and Tennessee) held in United States v. Quality Stores, Inc. that severance payments to former employees pursuant to an involuntary reduction in work force are not taxable “wages” for purposes of Medicare and Social Security withholding under the Federal Insurance Contributions Act (“FICA”).[1] This affirmed the earlier decision by the Western District Court of Michigan. [2] More >

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