Short-week benefits paid to workers who worked less than 36 hours in a week or who could not work due to weather were not linked to the receipt of state unemployment compensation and, therefore, were not excludable from wages for Federal Insurance Contributions Act (FICA) purposes as supplemental unemployment compensation benefits. Recipients of short-week benefits do not qualify for state unemployment compensation. Thus, the short-week benefits are not “linked to the receipt of state unemployment compensation” as required by Rev. Rul. 90-72.
Finally, automatic short-week benefits constitute wages for FICA and Federal Unemployment Tax Act purposes, unless the benefits are made to individuals who otherwise qualify for excludable regular benefits (i.e., if the automatic short-week benefits immediately precede or follow a week in which an employee receives regular benefits). (IRS Chief Counsel Advice 201634023, LTR Report Number 2015, August 25, 2016.)
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