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ballistixusa
Level 1

A employee wants to cashout her accrued annual leave. Is 401k payable on this cashout? She also only wants to pay the 22% tax rate?

 
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Best answer August 23, 2020

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john-pero
Community Champion

A employee wants to cashout her accrued annual leave. Is 401k payable on this cashout? She also only wants to pay the 22% tax rate?

Make certain to stroke a separate check (do not include in regular wages) and you can and should deduct a flat 22% for FWT https://www.irs.gov/pub/irs-pdf/p15.pdf see section on supplemental wages.

 

Other taxes and, as far as I can tell, 401k deductions remain the same as if it was regular wages

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2 Comments 2
john-pero
Community Champion

A employee wants to cashout her accrued annual leave. Is 401k payable on this cashout? She also only wants to pay the 22% tax rate?

Make certain to stroke a separate check (do not include in regular wages) and you can and should deduct a flat 22% for FWT https://www.irs.gov/pub/irs-pdf/p15.pdf see section on supplemental wages.

 

Other taxes and, as far as I can tell, 401k deductions remain the same as if it was regular wages

ballistixusa
Level 1

A employee wants to cashout her accrued annual leave. Is 401k payable on this cashout? She also only wants to pay the 22% tax rate?

Thank you very much,

 

regards

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