In short, yes.
Typically, when it comes to severance, the employer withholds a flat 22% supplemental wage rate. (Though this can be as high as 37% for amounts that exceed $1 million.) This withholding includes not just federal income tax but also Social Security and Medicare taxes (FICA).
If you've run your numbers and determined that you will owe more tax, yes, you should make estimated payments. Estimated payments are due quarterly on the 15th with the last payment for the year due January 15th of the following year. So for this year (2025) you've already missed the first quarterly payment. The second will be due June 15th, the third September 15th and the final in January 2026. Don't wait until April 2026 to pay your estimated taxes - you will open yourself up to interest and/or penalty. Remember, we are supposed to pay tax throughout the year as we earn income. (If you are not sure how much tax to pay, you may want to use one of our calculators to assist you. ( Tax Calculator ). Here is an article about how TurboTax calculates your estimated payment amounts: How Does TurboTax calculate my estimated payment amount?
If you make your payments online at irs.gov/payments, make sure you choose to have your payment applied to the correct year (2025). You'd be surprised how many people accidentally choose the wrong type of payment and the wrong year!
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