Resignation, What To Do With Accrued PTO??

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I recently accepted a new RN position at another organization and on Monday, I'm going to be giving my notice that I will be leaving the current company I am with.

I currently carry about 160 hours of PTO. Since I will no longer be with this organization due to my upcoming resignation, I see that for employees that are resigning, via their HR department, "the PTO balance will be paid out within two pay period after termination has been processed." The company's HR later says "PTO pay-outs are taxed at the higher supplemental tax rate as required by law"

I know I will already be hit hard with the taxes, however, is there any adjustments, or anything I could do, to not feel as if I've lost so much of the compensation for it once I resign?

Anybody have any prior experiences with this? Can I make any exemptions or adjustments prior to resigning or just accept the higher tax rate? Thank you.

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Specializes in Travel, Home Health, Med-Surg.

I would call your HR to find out if there are alternatives. I once had a similar situation and could transfer the money to an seperate account managed by a third party but could only be used for healthcare related expenses and premiums, I was using Cobra so it worked for me at that time. A bit more work but no extra/increase in taxes. Hope you can find something similar and good luck at the new job!

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I recently accepted a new RN position at another organization and on Monday, I'm going to be giving my notice that I will be leaving the current company I am with.

I currently carry about 160 hours of PTO. Since I will no longer be with this organization due to my upcoming resignation, I see that for employees that are resigning, via their HR department, "the PTO balance will be paid out within two pay period after termination has been processed." The company's HR later says "PTO pay-outs are taxed at the higher supplemental tax rate as required by law"

I know I will already be hit hard with the taxes, however, is there any adjustments, or anything I could do, to not feel as if I've lost so much of the compensation for it once I resign?

Anybody have any prior experiences with this? Can I make any exemptions or adjustments prior to resigning or just accept the higher tax rate? Thank you.

Use it up.

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Specializes in PACU, pre/postoperative, ortho.

At the end of the year, it won't matter. It will be included in your yearly gross & taxed according to that. If too much is taken out right now when you are paid your final check, then it's just that much more that will be applied on your tax return, either lowering your tax bill due or increasing your tax refund in April.

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Specializes in Pedi.

If you change your W4 allowance so that less is taken out in taxes, you're just going to owe more at the end of the year.

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At the end of the year, it won't matter. It will be included in your yearly gross & taxed according to that. If too much is taken out right now when you are paid your final check, then it's just that much more that will be applied on your tax return, either lowering your tax bill due or increasing your tax refund in April.

Yes, this is correct.

When you do your tax return, your income from this job is going to be one amount. There isn't line items for hourly pay, pto, bonuses, etc. that are taxed different amounts.

I here your concern all the time at work when people are cashing out pto or we are getting a bonus.

It's discouraging to me how many people don't have a basic understanding of this works, and that they only seem to know about how much taxes they pay in how much us taken out of their paycheck and how much refund they get when they file tax returns.

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For whatever reason, the withholding rate on supplements and bonuses is higher, but the actual tax rate at the end of the year is the same.

I think most people would be astounded by what they would learn, if they would just do their own taxes one time, by hand, not with a software program, but with a book.

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If you still have time left to do it, go to HR and change your tax witholdings to claim 99 for your last check so that it doesn't get taxed. Where I live, you can actually do this about 5-6 times per year without having to owe, check with your CPA, but once certainly won't hurt you.

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Specializes in Nurse Leader specializing in Labor & Delivery.
Use it up.

A lot of places have a policy wherein you cannot use your PTO in lieu of your 2 weeks' notice.

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^ That's why you schedule your vacation, come back, and resign LOL.

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Specializes in Psych ICU, addictions.

Call HR and see what your options are. But keep in mind that many places will not let you take PTO while you are working your notice.

Best of luck at the new job!

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We are near the end of the year. Is there anything you can do before 12/31 to lower your overall tax rate? Can you squeeze out a kid in the next 5 weeks? What if you park the cash in an IRA or something?

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