Is severance pay received by a nonresident taxable for Georgia purposes?
• Severance pay received by a nonresident is not taxable for Georgia purposes. Non taxable severance pay is defined as pay that is received for which no services are rendered in Georgia. Any portion of the income included in the W-2 that is received for past or future services rendered in Georgia, including accrued vacation, sick pay, and holidays, will still be taxable for Georgia purposes as is outlined in the next question. For example, a taxpayer is terminated by a Georgia employer but the employer agrees to pay them $500 per week severance pay for two weeks. No services are required to be rendered to receive this pay. The first week the taxpayer receives a check for $1100, which includes $500 of severance pay and $600 of accrued vacation pay. The $600 accrued vacation pay is taxable for Georgia purposes but the $500 severance pay is not taxable. The next week the taxpayer receives a check for $500 for severance pay. This is not taxable for Georgia purposes.
Related Questions
- A long-term, but part-time, employee was permanently laid off with two weeks’ notice and received severance pay as per our policy. If he receives unemployment benefits, will the company be charged back for all of his benefits, or else receive a "break" for the amount of severance paid?
- Are vacation, holiday, and sick pay for a nonresident who works in Georgia taxable for Georgia purposes?
- Is severance pay received by a nonresident taxable for Georgia purposes?
