HiCustomer Thank you for asking your question on JustAnswer.
-How do you get taxed meal penalties ? are they included into your W2 form?-Did you actually received or paid these penalties?-Can you provide more details on these penalties?Thank you again for trusting us with your problem.
Yes - California law provides - if an employer fails to give a meal break, the employee can recover one hour of pay at their regular rate of pay.
These payments are considered your wages and as such ought to be reported on W2 form as wages.
Some employers in additional report that amount in the box 14 - but that is for information only - there is no separate category for that amount and there is no separate tax treatment.
The information that such compensation is not taxable is incorrect.
Your employer absolutely correctly included this compensation into your taxable income - and you may not simply exclude it.
To claim a deduction - you should have some legit expenses that qualify for deductions.
In this situation we are talking about additional income - not about expenses that may be written off...
That sounds as misunderstanding...
but also possible that your friends are in situation of "creative" accounting - and that is only a matter of time when they will be caught...