Legal Question in Workers Comp in California
My wife was on Labor Code 4850 for a year in 2012. It appears only a small amount taxes were deducted by the county employer, on her W-2's. Yet we now owe over $1,000.00 in back taxes, according to the state and feds. Is this correct? We were told 4850 time was TAX FREE.
Asked on 9/05/14, 5:35 pm
1 Answer from Attorneys
Nancy Wallace
Nancy Wallace Atty at Law
My understanding is that LC4850 is Salary Continuation. So if taxes are due on a Salary, the same would be due on Salary Continuation.
The confusion comes in because Temporary Total Disability indemnity is NOT a 'taxable event'. So you can assert to the IRS that 2/3 of the Average Wage was non-taxable Temporary Disability and the only taxable amount was the extra 1/3, and show the IRS Labor Code 4600.
Answered on 11/06/14, 3:19 pm
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