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It would tax this money at 42% instead of the normal tax bracket. Can it do this?
Asked on April 23, 2012 under Employment Labor Law, California
Answered 13 years ago | Contributor
Severance package is still considered income and you should pay income taxes. However, it should be taxed at your regular tax rate. You should ask why the 42%. You would eventually get the money back when you file tax return next year.
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