Alabama severance pay from voluntary separation was taxable


An employee who retired from his job in order to accept his employer’s voluntary separation plan was not permitted to claim an exemption from Alabama personal income taxes based on severance pay. According to the Tax Tribunal, an employee who voluntarily retires from his or her job is not entitled to the exemption. (McNeeley v. Alabama Department of Revenue, Alabama Tax Tribunal, No. 14-1094, June 18, 2015.)

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