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Question

Lump sum severance

Forum|Forum|2 years ago
January 31, 2024
1 reply
15 views

I reside and work in NYC, I received a one-time lump severance and taxes were taken out of that payment at almost 37%. How is this possible when my yearly income is set to a lower tax bracket?

Ask the Experts - Early Filers - Jan 2024

Level 15

Often lump sum payments have taxes with held at a higher rate assuming that the lump sum will kick the taxpayer into a higher bracket. For the future you can make sure to request lower with holding for large lump sum payouts prior to them being paid. For now the only thing that you can do is enter the amounts into your tax return and get a refund of the extra withholding.

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