Question by  Kason (8)

Is severance pay taxed if you agree to an early retirement?

I agreed because they offered me six months' severance. So will that money be taxed?


Answer by  Travis404607 (3916)

Severance pay money is income, so it is typically taxed on both a federal and state level, unless you qualify for some sort of exemption. You can check with the IRS or an accountant if you think you qualify for an exemption.


Answer by  JohnHolmes (2660)

Yes this will be taxed but it may not necessarily be taxed by the company you may have to pay it on your own later.

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