text: The amount is taxable.  Depending on the employer it may be possible to stretch the payments over several years to reduce taxes.\n\nThe tax rate is entirely dependent on what your other income is, your marital status and how much your spouse earns, number of kids (for exemptions), and your other deductions.  If you cross a certain amount of income the IRS starts to limit your deductions.  And of course you may simply run into the AMT.