Which of the following is NOT considered post-severance compensation?

Post-severance compensation refers to payments made to an employee after they have ceased employment with a company. This includes earnings such as final paychecks, payouts for unused vacation days, and any deferred compensation that was earned while the individual was still employed but is received after termination.

The element that does not qualify as post-severance compensation is a reduction in salary. A reduction in salary pertains to changes in compensation during the period of employment, specifically reflecting a modification to the employee's pay structure while they are still actively working for the employer. It does not fall into the category of compensation received after employment has ended.

Understanding the distinction between payments received while employed and those received after severance is crucial for grasping the complexities of compensation documentation and processing, particularly in relation to benefits and tax implications following an employee’s departure.