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Last word on severance

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in Small Business Tax,Small Business Tax Deduction Strategies

In a case decided last year, the 6th Circuit Court of Appeals held that severance payments made to employees aren’t treated as taxable wages for payroll tax purposes, opening up refund opportunities. (Quality Stores, 110 AFTR2d 2012-5827, 9/7/12)

But the Quality Stores decision conflicts with another federal court holding. The Supreme Court will now decide the issue by June.

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