Small Business Reading Room


Wednesday, November 24, 2004

 

New Revenue Rulings Regarding Employment Contracts

The IRS recently published two new revenue rulings regarding payroll taxation of employment contract payments. The two issues addressed by the rulings are:
  • Payments for signing bonuses, as frequently found in professional sports - Revenue Ruling

  • Payments in lieu of completion of a contract. These are cancellation payments - Revenue Ruling

In very general terms, the IRS is consistent in claiming that all payments under an employment contract are subject to FICA, FUTA and income tax.
posted by Larry at 1:59 PM - permalink 0 comments


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Delaware Intercorp, Inc.
113 Barksdale Professional center
Newark, DE 19711-3258

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