ROSELAND, N.J., Jan. 15, 2014 /PRNewswire/
-- ADP®, a leading global provider of human capital
management solutions, today announced that the company, in
conjunction with a third-party tax practitioner, is offering a new
Protective Claims Service to potentially eligible employers to help
preserve their right for a refund of FICA taxes remitted on certain
types of severance pay in 2010 pending a final decision in the
United States v. Quality
Stores, Inc. case (the "Quality Stores" case). The U.S. Supreme
Court hearing for the Quality Stores case was held
January 14, 2014, but a decision may
not be issued until the summer. The outcome of the case may
determine whether employers are eligible for a refund of FICA taxes
remitted on certain types of severance pay made in tax year 2010 to
present. Businesses that believe they may be eligible for a refund
of 2010 FICA taxes -- assuming a ruling by the court determines
that they are entitled to one -- must file a protective claim with
the IRS no later than April 15, 2014,
due to the statute of limitations.
ADP's Protective Claims Service includes:
- Filing of 2010 tax year protective claim (IRS Form 941-X)
- Tracking of the claim and IRS responses
- Following the progress of the ongoing Supreme Court
litigation
- Third-party tax practitioner assistance with the final refund
calculation for all applicable tax years 2010-present, if
applicable
- Assistance with outreach to qualified employees
"The United States vs.
Quality Stores case decision could mean the refund of Social
Security and Medicare taxes paid by employers on severance pay –
which could potentially add up to a substantial sum for some
businesses," said Kerstin Nemec,
Vice President of Business Incentives, ADP. "While the
deadline for filing protective claims for a refund on taxes paid on
severance pay in 2010 is April 15 of
this year, we encourage businesses to file earlier than that to
allow for IRS processing times. And for those employers who need
assistance in preserving their right to a potential refund, ADP, in
conjunction with our third-party tax practitioner, has put tools in
place to help them file a protection claim for any refund that may
be due."
Some estimates place the overall value of FICA taxes remitted on
severance pay that could be refunded to employers as high as
$1 billion. According to Worker
Adjustment and Retraining Notification (WARN) Act Compliance data
published by U.S. Department of Labor, more than 175,000 employees
were impacted by plant closings and mass layoffs in 2010 alone.
Among the top five states impacted were California, New
York, Pennsylvania,
Florida and Illinois. The industries that felt the
greatest impact were healthcare, transportation, banking and
retail. For most taxpayers, this court case may affect FICA taxes
paid in 2010 and subsequent years.
Employers who believe they may be eligible for a refund of FICA
taxes can contact ADP at 855-472-5556 to learn more about the
company's protective claim filing service.
About the United States
vs. Quality Stores, Inc. case
Litigation around the
issue of FICA taxes remitted on severance pay began in 2001 when
Quality Stores, Inc. declared bankruptcy and then filed a claim for
a $1 million refund with the IRS in
2002. The case has now made its way to the U.S. Supreme Court,
which began hearing oral arguments on January 14, 2014. The case centers on the
question of whether severance pay made as part of an employee's
involuntary separation is subject to FICA taxes. If the court holds
that such severance pay is not subject to FICA taxation, employers
and employees may be eligible for a refund of taxes previously
paid. Due to the IRS statute of limitations, only taxes paid in
2010 and later are still subject to consideration for refunds;
protective claims on 2010 taxes must be received no later than
April 15, 2014, and because there may
or may not be a Supreme Court decision by that time, employers may
want to file a protective claim as soon as possible to preserve
their right to a refund should the decision allow.
Tweet this: Eligible for a refund
of #FICA Taxes Paid
on #Severance? @ADP assisting w/ Protective Claims
Filings http://bit.ly/FICAclaim #ADPcompliance
About ADP
With more than $10
billion in revenues and more than 60 years of experience,
ADP® (NASDAQ: ADP) serves approximately 600,000 clients
in more than 125 countries. As one of the world's largest
providers of business outsourcing and human capital management
solutions, ADP offers a wide range of human resource, payroll,
talent management, tax and benefits administration solutions from a
single source, and helps clients comply with regulatory and
legislative changes, such as the Affordable Care Act (ACA).
ADP's easy-to-use solutions for employers provide superior value to
companies of all types and sizes. ADP is also a leading
provider of integrated computing solutions to auto, truck,
motorcycle, marine, recreational vehicle, and heavy equipment
dealers throughout the world. For more information about ADP
or to contact a local ADP sales office, reach us at 1.800.225.5237
or visit the company's Web site at www.adp.com.
The ADP logo and ADP are registered trademarks of ADP,
Inc. All other marks are the property of their respective
owners. Copyright © 2014 ADP, Inc.
Media Contacts:
Kira Lee Lakin
(909) 612-5007
Kira.lakin@adp.com
ADP Public Relations
(973) 974-7612
public_relations@adp.com
SOURCE Automatic Data Processing, Inc.