severence agreement

[damnit!]

Hawaii

Is the money that I receive from a severence check taxable by the issuing company? Am I still considered an employee if I am receiving severence pay? The severence agreement stated that I would be responsible for paying federal and state taxes on the check and was shocked to see a 7200.00 check reduced to a little over 4000.00 after taxes. I knew something was wrong but wasn't sure until I recieved a W2 form stating that a total of 2000.00 was taken out in federal and state taxes and also medicare tax. So my question is where did the remaining 1000.00 go? Does the company owe me this money or is my computation wrong? Thanks for any help you can give me.

 

[Ramoth]

Yes, severance checks are usually taxed just like payroll checks. If you don't think the numbers are correct, look at the check stub that you should have received with the payment, or contact your former employer and ask for an explanation.

You are no longer considered an employee if you're receiving severance, but you may not be eligible for unemployment insurance while you are receiving severance (depending on how the severance is paid out, and what the UI regs are in Hawaii).