FICA withholding by non-employer post merger?

[Guest mjb225]

Has anyone encountered the situation where a company is acquired and as part of the deal the buyer puts funds into a liquidating trust for certain former seller employees (not shareholders), to be paid out at intervals after the deal closes? Assume the amount is being paid for past compensation and that these individuals never have nor will end up working for buyer. Does the trust withhold FICA? Does the buyer withhold FICA? That's essentially withholding FICA on non-employees, but nothing else seems to make sense.

Thanks,

m.

[QDROphile]

What determines when the amounts become FICA wages? It sounds like someone may be acting as an administrative agent of the [now dissolved?] employer that is paying the FICA wages, but I am not clear about what is going on.

[Steelerfan]

You have to check the contract to see who retains the liability. Normally I'd think the buyer steps into the shoes of the seller and becomes responsible for FICA. The way I look at it is that it will be the buyers responsiblility in reality when the IRS comes looking for the money, so the buyer has to make sure the tax is paid.