March 7, 2008

Special Issue

Federal Circuit Concludes All Layoff Payments Made
During a Reduction-in-Force Are Subject to FICA Taxes

The U.S. Court of Appeals for the Federal Circuit has concluded that all payments to workers involuntarily laid off during a reduction-in-force were subject to Federal Insurance Contribution Act and Railroad Retirement Tax Act taxes. CSX Corp. v. United States, 2007-5003, -5007 (Fed. Cir. March 6, 2008).

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