City Wage Tax Deducted from Severance Pay?

[Sweety_tweety]

I was just laid-off from my job. I am told by our HR Department that the City (Wilmington, DE) will continue to deduct City Wage Tax from my severance pay. I was wondering if other Cities do this. It is a considerable chunk of change. This just does not seem right to me.

In the past if a business person traveled considerably, they would be able to submit support of their travel dates and get partially reimbursed for the time not spent in the City. Thanks for any thoughts.

 

[msmayor]

Severance is considered income, and therefore is taxed like income.

This doesn't sound unusual.

 

[disney1990]

I would assume that any taxes that are normally taken out of your paycheck, would also be taken our of your unemployment -- federal, state, etc. That is how it works in Maryland. However, in Maryland, you have the option of having no taxes taken out of your check -- but you might then own taxes when you file your return.

 

[Allison]

Sounds normal to me

 

[Sweety_tweety]

Honestly, the State and Federal taxes taken out did not surprise me, but the City still taking out taxes did surprise me. I guess it is what it is. Thanks for the feedback.