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US PAY: Large 457 deduction from payout... still federal taxes withheld
We regularly have leave payouts for terminated employees, which elect to have it all go to their deferred comp acct. However, there are are still federl and state taxes being withheld. We are finding the that the taxable amount is the SS and Med withholding amount. Example: Gross payment $20,000. Election to have it all go to def comp. SS/Med of 7.65% of 1530.00 is now becoming federal and state taxable... Not as I would expect... Would only expect SS/Med withheld, remaining 18470 go to def comp. Anyone else experiencing this, know of a configuration change....
Thanks - Carrie
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