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Are penalties received from an employer per Section 201 and…

Customer Question
Are penalties received from an...
Are penalties received from an employer per Section 201 and 227.3 income taxable?
Submitted: 2 years ago.Category: Tax
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Answered in 21 minutes by:
2/5/2016
Tax Professional: LawTalk, Attorney replied 2 years ago
LawTalk
LawTalk, Attorney
Category: Tax
Satisfied Customers: 37,876
Experience: I am a practicing attorney with more than 3 decades of experience in the legal field.
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Good morning,

I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today. In order to give you a clear and concise answer, I will need some additional information about the circumstances, please.

1. Just so we are on the same page, you are referring to the CA Waiting Time Penalty, yes?

Doug

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Customer reply replied 2 years ago
No, the employer agreed to pay the "penalty" for failing to pay the employees final commissions earned within 72 hours of termination.
Tax Professional: LawTalk, Attorney replied 2 years ago

Good afternoon,

Alright, thanks. That is essentially the same thing---it is a penalty for failing to pay wages on time..

To the employee receiving the penalty, because it is not legally a gift, it does constitute income and is taxable to the recipient.

You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.

Please be so kind as to rate my service to you. That is the only way I am credited for assisting you.

I wish you and yours the best in 2016,

Doug

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