Severance Payout

[J-Law79]

Jurisdiction

California

I was just unfortunately informed that I will be laid off from my job due to a company acquisition. Fortunately, I will receive a severance package that amounts to $13,600.

My salary is at $88K. Are there tax benefits to take into account if I request that my severance is paid out bi-weekly? Or, would a lump sum be taxed in the same manner?

I also need to take into account when I can file for unemployment insurance, so I'm wondering if a lump sum would be best so I can cut ties, and file for UI quicker. I do want to make sure my severance isn't taxed up the wazoo though.

Thanks for any advice!

 

[hrforme]

your employer is not required to allow you the choice on how the severance is paid out or taxed. Did they actually do so?

Per EDD, "Severance pay is not deducted from unemployment insurance benefits and does not affect your eligibility to receive benefits. The method of payment, such as a lump sum payment or payments paid to you at regular pay period intervals does not change the nature of the payment."

 

[zddoodah]

Are there tax benefits to take into account if I request that my severance is paid out bi-weekly? Or, would a lump sum be taxed in the same manner?

Assuming your employer gave you an option about how the severance will be paid, why not ask your employer's payroll person how it will be taxed?