Severance pay from Florida after moving to Michigan

[Michael179]

Hello,

I lost my job June 6, 2022 due to a permanent closure. Part of the agreement was to pay one week of severance for every year of service (in my case 18 extra weekly pay checks). The following Monday (June 13, 2022) I started a new job in Michigan. I assume I have to pay state tax on each servance check from my previous employer in Florida (it was not a lump sum, they paid as if I worked 40 hours a week in weekly installments). 

I am unsure of HOW to enter this amount. It was not listed on my W2 as severance pay, just a total amount of income earned for the year. I do KNOW the exact amount by looking at my final pay stub which lists "Severance Plant Closing". I just do not know WHERE to enter this amount for the state of Michigan. I've searched Turbo Tax and have come up with nothing. Ready to file now and this is the hold up as I would like to get it resovled.

[ThomasM125 · Accepted solution]

The severance pay would not be listed separately on your W-2 form, as it is taxable the same as ordinary wage income. It should be included in the line 1 entry on your W-2 form. So, you should enter your W-2 form as it is stated. If you see the Michigan abbreviation (MI) in box 15 on your W-2 form and the severance pay included in box 16 on the W-2 form, then you don't need to do anything additional.

When your prepare your Michigan tax return, you need to indicate that you are a part-year resident of the state. If the severance pay does not appear on your Michigan return, you need to go through the state program again and in the income section you should see an option to adjust your wages to include the severance pay. 

You can view a summary of your Michigan return to see if the severance pay is listed on it by following these instructions while in the state portion of TurboTax online program:

1. Click on Tax Tools in the left menu bar
2. Click on Tools
3. Look under Other Helpful links….
4. Choose View Tax Summary

[Michael179]

Thank you, I will give it a try this coming weekend when I have a little more free time. Then I'll report back and let you know how it went.