SCOTUS: Severance Payments are Taxable Wages Under FICA

This just in! Minutes ago, the Supreme Court issued its opinion in U.S. v. Quality Stores, Inc. If you want to plow through 15-pages of FICA analysis, be my guest. If you want the cut-and-paste of the bottom line:

This case presents the question whether severance payments made to employees terminated against their will are taxable wages under the Federal Insurance Contributions Act (FICA), 26 U. S. C. §3101 et seq . . . . The severance payments here were made to employees terminated against their will, were varied based on jobseniority and time served, and were not linked to the receipt of state unemployment benefits. Under FICA’s broad definition, these severance payments constitute taxable wages.

Justice Kennedy for a unanimous Court, minus Justice Kagan who did not participate.