He was offered severance pay for early retirement. where does that go?

The severance pay should already be included in the gross income in box 1 of the W-2 and the federal taxes withheld will be included in box 2 of the W-2.

Hi employer should have sent him a W-2 which included the amount of the severance pay he received.  If he did not get one, he should contact his employer to find out if they sent him one and for some reason he did not receive it or to find out if they will be issuing one if they did not already.  It is possible that they posted it online.  

If his employer did not or will not send a W-2 click the link below for multiple options including contacting the IRS and requesting a Wage and Income Transcript. 

What To Do If You Haven't Received a W-2