A friend of mine recently became unemployed. His company offered him severance pay. But, in order to receive severance, he had to sign paperwork agreeing not to sue the company. He was supposed to receive 64,0000. But, his employer took 25,000 in taxes. This leaves him with very little money until he can find another job. Can he still collect unemployment in additon to severance pay?
2007-12-27 13:53:15 · 5 answers · asked by Snobunny 5 in Business & Finance ➔ Insurance
Yes, he can collect unemployment. But his employer did not 'take' 25k in taxes, they withheld the 25k as required by law, and he should be glad. If the remaining 39k is 'very little money' to you (and him), the 25k would probably get blown if he had it, and then he'd have a big problem with the IRS.
If it was me, I'd see if I could be paid the 64k over as long a period as possible, at least 24 months, to lower the tax bite, instead of taking it in a lump sum.
2007-12-27 14:05:57 · answer #1 · answered by curtisports2 7 · 2⤊ 0⤋
In Ohio, your unemployment benefits don't start until after the period of your severance pay.
My husband lost his job in June and received 1 month's severance pay. His unemployment payments were delayed by 1 month due to the severance pay. I believe the state confirmed with his former employer whether or not there was any severance pay, so its not like he could have "hidden" that from the state. (not that he would have been dishonest about it...I'm just pointing that out for anyone out there who might be tempted to "hide" the severance)
2007-12-28 18:30:16 · answer #2 · answered by sarah314 6 · 0⤊ 0⤋
He should apply for unemployment as soon as possible. However, he may not receive any payment until he has received all the outstanding payments due him from the company. Check the state website for the department of labor, and look for the unemployment compensation page - it will provide the best information, and contact numbers if you need a more specific answer than provided.
2007-12-27 22:10:37 · answer #3 · answered by Piggiepants 7 · 1⤊ 0⤋
You should apply as soon as possible. Answer all questions honestly and let them determine the date you qualify for payments. Don't wait until you think you qualify; however, you may still may be required to seek another position even in the meantime. Remember you do not have to accept just any other position available. You are allowed to refuse offers.
2007-12-27 22:04:11 · answer #4 · answered by gismoII 7 · 0⤊ 0⤋
He'll have to file for unemployment, disclose the severance, and find out. Rules vary state to state.
2007-12-27 22:23:54 · answer #5 · answered by Anonymous 7 · 1⤊ 0⤋