The U.S. Supreme Court has granted certiorari in United States v. Quality Stores Inc. (No. 12-1408), paving the way for the high court to determine whether Federal Insurance Contributions Act (FICA) tax applies to supplemental unemployment benefits (SUB) payments.
A favorable decision would allow businesses nationwide to obtain FICA tax refunds on those SUB payments. It would affect almost every client who made severance payments in an open year. Clients should preserve their ability to obtain refunds by filing protective claims or extending their window for filing suit on any denied protective claims. The 2010, 2011 and 2012 calendar years are open, and 2010 will close on April 15, 2014. The court is expected to hear arguments in early 2014 and issue a decision by July 2014.
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