I've received email from a few people concerned about what Prop. 30 means for them. Here's one that I'll share following Wednesday's post on "Prop. 30 has passed, but how do you pay retroactive taxes?"
What about individuals like myself who are high-income W2 wage earners and have their state income taxes withheld via each paycheck? I don’t pay quarterlys! I will have underreported with a possible penalty! Mr. Chamberlain didn’t address that! But my guess is that he will be so gracious and not charge a penalty. What if I don’t have that extra cash sitting around?
Jay Chamberlain got in touch with the Franchise Tax Board on this one, to make sure we had the right answer. Indeed, the same waiver without penalty applies to the withholding issue as it does for an estimated payment, Chamberlain said. When there's a law change that affects taxes within the same year, the state can waive the additional money that would go into that estimated payment without a penalty — along with the money that would go toward withholdings, Chamberlain said.
Withholdings will be automatically adjusted once 2013 comes along, he said. Then they'll be accurate.
So as long as you pay what's due by April 15, you're fine, Chamberlain said. If you don't have the money to pay, Chamberlain said, the Franchise Tax Board has ways of working out payment plans and can provide more specifics on that issue depending on your circumstances.
Do you have a question about how Prop. 30 might affect you? Feel free to email me or comment here.