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Author: saintjoan Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: CA flags W4s with "too many" exemption Date: 2/11/2006 1:36 AM
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We just got this from our friendly payroll service. Here in CA, we are required to send "questionable" W4s to the Franchise Tax Board. "Questionable" is defined as one of the following:

* The employee claims more than 10 withholding exemptions
* The employee claims exemption from withholding but wages are normally more than $200 a week
* The employee makes major changes to Form W4 such as crossing out words or writing more than usual
* The employee admits that Form W-4 is false.

In the event the FTB finds no reasonable basis for the number of withholding allowances claimed, the employee may be subject to a $500 penalty.

Just as a point of info for CA residents who may be trying to figure out what they should put down on their W4s.
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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 83814 of 121219
Subject: Re: CA flags W4s with "too many" exemp Date: 2/11/2006 9:28 AM
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We just got this from our friendly payroll service. Here in CA, we are required to send "questionable" W4s to the Franchise Tax Board. "Questionable" is defined as one of the following:

* The employee claims more than 10 withholding exemptions
* The employee claims exemption from withholding but wages are normally more than $200 a week
* The employee makes major changes to Form W4 such as crossing out words or writing more than usual
* The employee admits that Form W-4 is false.

In the event the FTB finds no reasonable basis for the number of withholding allowances claimed, the employee may be subject to a $500 penalty.

Just as a point of info for CA residents who may be trying to figure out what they should put down on their W4s.


Fairly close to the old IRS rules. Nothing that's been discussed in this thread comes close to triggering the fine. If the seemingly large number of withholding allowances generates total withholdings that are close to the final tax liability, there's a "reasonable" basis.

Ira


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Author: whyohwhyoh Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 83865 of 121219
Subject: Re: CA flags W4s with "too many" exemp Date: 2/12/2006 4:32 PM
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Hmm.

I claim 15 deductions+$25 extra for CA. This was based on an old 7.07% home interest loan. My loan has been 3.375% for the past 3 years so I have owed a "considerable" amount each year, which I don't mind.

If they want to charge interest on it, I wouldn't mind either, but a fine would suck.

--
whyohwhyoh

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Author: saintjoan Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 83874 of 121219
Subject: Re: CA flags W4s with "too many" exemp Date: 2/12/2006 7:16 PM
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From the note we got from the payroll service, I can't tell if we are supposed to go through all the W4s on file to look for questionable ones. I would guess the FTB would say we have to, but it's not clear. (It's not a big deal to look through the dozen W4s on file.)

So I don't know what your employer will do.

From an employer perspective, it is pretty annoying, it's one more thing we have to monitor whenever we get new hires (which is a few times a year, we hire on a project basis).




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