Three topics: fib extension, paystub info and reporting problems.

• Author: Williams, Len
• Position: CATax

This month we cover tltree subjects:

* The extension of the mortgage forgiveness debt relief exclusion;

* What information employers are required to furnish on a paystub: and

* The problems involved in reporting state income tax withheld on real estate sales

Mortgage Forgiveness Debt Relief Has Been Extended Through 2013

As you're likely aware. Gov. Brown signed AB 1391 in July. The bill retroactively extends California partial conformity to the federal exclusion of income from the discharge of qualified mortgage debt to tax year 2013. Further details are available at blogs.cakpa.org/buzz/2014/08/05./mortgage/.

The Information Employers

Are Required to Furnish on Paystubs

California Labor Code Sec. 22b spells out the information employers are required to provide- on a paystub. If the required information is not provided, nor adequately provided i.e. missing some information:, then the employer may be hit with a $50 penalty for the first-time oflense, followed by a [pounds sterling] 100 penalty lor each subsequent offense.

An attorney friend of a CalCPA member has a client who was just hit w ith a penalty for damages of $130,000 (plus attorney's fees) because the "Period Beginning Date" was omitted. It was picked up when a disgruntled employee went to an attorney to see if he had a basis to sue lor wrongful termination. He didn't, but the attorney picked up on the faulty stub.

Another "gotcha" moment: Although the payroll service may be on the hook, the contract the employer signed might stipulate that the venue for dispute is in Ohio, for instance--so ... off to the Ohio courts, apparently.

This is something of a wake-up call lor employers to ensure they are compliant, and a reminder to ask payroll service providers to confirm that they understand this California Labor Code and also are in compliance.

Form 593 (Real Estate Withholding Tax Statement) Problems Numerous recent reports on the TaxTalk listserve have discussed problems CPAs are experiencing with the real estate tax withholding statement. Form 593. There have been so mam that the subject has been submitted to the FTB as a requested item to address during this fall's liaison meeting between the CalCPA Committee on Taxation and the FTB.

Meanwhile, these are some of the problems to look for as 593 forms show up:

* One married couple, filing as "married filing jointly," received a Form 593 reporting the full amount withheld but the Form 593 only showed one spouse's name and Social...