Submitted By: someone
Answered: January 16, 2019 8:54 pm

My company is closing and I’m going to receive a large amount of severance pay. When is this taxable?

Severance pay is taxable in the year in which it is received. If it’s received in a lump sum, then it’s taxable in one year. If it’s spread over two or more years, then the portion received in each year is taxable in that year.

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Tax Glossary

Depreciation

Writing off the cost of depreciable property over a period of years, usually its class life or recovery period specified in the tax law.

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