Section 16.19 Fourth Priority Taxes on Wage Claims

• Library: Bankruptcy Practice (2007 Ed. + 2015 Cum Supp)

3. (§16.19) Fourth Priority Taxes on Wage Claims

Under the Bankruptcy Code, certain wages, salaries, commissions, and vacation and sick pay of employees are treated as fourth priority claims in an employer’s bankruptcy. This pay cannot exceed $10,000 and the employees’ services must have been performed within
180 days before the bankruptcy filing—or the cessation of the employer’s business, if it occurred earlier. 11 U.S.C. § 507(a)(4)(A)–(B). While the Bankruptcy Code makes no mention of how taxes on
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