Suppose Cisco gives you a year's salary as part of the ER/LR. Do they give you a lump sum or continue the bi-weekly payments? If they give you a lump sum the income tax would be severe unless lump sums like this are treated differently from ordinary income.
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No matter what the witholding may be all will be trued up with 2020 earnings at tax time.
Also, remember that some of this may be above FICA limits for you, but those limits are high in 2020. Be sure you look at the 2020 limit for your calculations.
Couldn't they have structured it as a limited defined benefit plan instead, to help us defer the taxes? Getting hit with a large payment at the end of the year would s—.
In 2011, the ER payout was treated as supplemental income which in the US is flat tax rate of 22%. Probably had this info in the package details
I don't think you can collect unemployment if you take the ER package, but I wouldn't worry about that. What you'd get in unemployment is not enough to make up for the extra pay in the ER package.
Can you still get unemployment benefits if you take the package VS. getting LRd.
Have all the emails gone out - even on the West Coast USA do we know?
Lump sum and about 1/2 goes in taxes asap. Nothing you can do about it.
i week for each year above 10???? How does that make sense????
Is ER Early Retirement? What is LR?
Are these packages being offered as a choice for employees or more like an involuntary layoff?
9 months salary plus 1 week of Weekly Base Pay for each completed Year of Service from the 10th Year of Service to the 19th Year of Service; and
(ii) 2 weeks of Weekly Base Pay for each completed Year of Service from the 20th Year of Service and beyond.
Health Care Benefits Payment: A lump sum payment (grossed up to cover taxes) equal to 9 months of COBRA premiums
Yes it is a lump sum, and will be treated as income. The taxman is going to love you.
Believe it is a lump sum. If they REALLY wanted to help employees they should make it hit in 2021.