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Reporting an employee severance payment on a 1099?
January 10, 2024
Q. I have a severance payment to a former employee (we are unbale to pay via Payroll) and will make this payment via Accounts Payable. Is this payment considered a 1099 event, if so, should this be reported on Form 1099-MISC, Box 3 Other Income?
A.
(Answered by IOFM's third-party tax experts)
No, it cannot be treated as a Form 1099 reportable nonwage payment. Severance pay to a former employee is reported on Form W-2 along with any other employment-related income of the individual.
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