Document ID: ./input/supremecourt_opinions/opinions/13pdf/12-1408_6468.pdf
Page Number: 4

Cite as:  572 U. S. ____ (2014) 

1 

Opinion of the Court 

NOTICE:  This opinion is subject to formal revision before publication in the
preliminary  print  of  the  United  States  Reports.  Readers  are  requested  to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington,  D. C.  20543,  of  any  typographical  or  other  formal  errors,  in  order
that corrections may be made before the preliminary print goes to press. 

SUPREME COURT OF THE UNITED STATES 

_________________ 

No. 12–1408 
_________________ 

UNITED STATES, PETITIONER v. QUALITY 

STORES, INC., ET AL. 

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

APPEALS FOR THE SIXTH CIRCUIT
 

[March 25, 2014]

 JUSTICE KENNEDY delivered the opinion of the Court. 
This case presents the question whether severance pay-
ments  made  to  employees  terminated  against  their  will 
are  taxable  wages  under  the  Federal  Insurance  Contri-
butions Act (FICA), 26 U. S. C. §3101 et seq.

The Court of Appeals for the Sixth Circuit held that the
payments  are  not  wages  taxed  by  FICA.  To  reach  its 
holding, the Court of Appeals relied not on FICA’s defini-
tion  of  wages  but  on  §3402(o)  of  the  Internal  Revenue
Code, a provision governing income-tax withholding.  That 
conclusion, for the reasons to be discussed, was incorrect. 

FICA’s broad definition of wages includes the severance 
payments  made  here.    And  §3402(o)  does  not  alter  that
definition.    Section  3402(o)  instructs  that  any  severance
payment “shall be treated as if it were a payment of wages.” 
According  to  the  Court  of  Appeals,  §3402(o)  suggests
that  the  definition  of  wages  for  income-tax  withholding 
does not extend to severance payments; and so, the argu-
ment continues, severance payments also must be beyond
the  terms  of  FICA’s  similar  definition.    But  §3402(o)  is
entirely  compatible  with  the  proposition  that  some  or  all