Home > Hot News and Notes

Payroll conformity for LLC members on the horizon?

Thursday, March 04, 2010

Payroll conformity for LLC members on the horizon?

There are two significant nonconformity problems when it comes to employment taxes for LLCs:

Some LLC managing members are treated as employees for federal purposes, but not treated as employees for California; and
Some nonmanaging members are not treated as employees for federal purposes, but treated as employees for California purposes

SB 1244 (Walters) would provide California employment tax conformity to federal and state income tax laws. Currently, the bill is drafted only to address LLCs that have made S corporation elections. However, Spidell has been in touch with the author’s office to let them know that the bill should cover both C and S corporations.

Spot tax trends in motion. Get up to speed with
Spidell's FREE Tax Flash E-Mail.

Printer Friendly Send to a Friend

This information is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice and assumes no liability whatsoever in connection with its use. Because tax laws are constantly changing, and are subject to differing interpretations, we urge you to do additional research before acting on the information contained in this document.

Original material in Spidell's California Taxes On-Line is copyrighted and may be reproduced for educational purposes or quoted by crediting Spidell's California Taxes On-Line.

Spidell's California Taxes On-Line is operated by Spidell Publishing, Inc., P.O. Box 61044, Anaheim, CA 92803-6144. FAX: (714) 776-9906.

User Agreement By entering this site you agree to the terms of our USER AGREEMENT