Severance pay
Varies
Is Severance Pay Taxable?
Short answer: Severance is taxable wages, usually withheld at the 22% supplemental rate.
Contributing more to a 401(k) or HSA in the same year can offset it.
Records to keep: Keep receipts, statements (1098, 1098-T, 1099, W-2G), and a note of what each cost was for. Compare itemizing to the 2026 standard deduction before you claim.
BW-B22-00235
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Severance pay
Varies
Individuals / Personal Taxes
Other Expenses
Personal Tax Deductions
Severance is taxable wages, usually withheld at the 22% supplemental rate.
BizWriteOffs provides educational information only and is not tax, legal, or accounting advice. Deductibility depends on your specific facts and records. Consult a qualified tax professional.
Business justification
Severance is taxable wages, usually withheld at the 22% supplemental rate. Contributing more to a 401(k) or HSA in the same year can offset it.
Category
- Personal Tax Deductions
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