Do I need to pay Federal and State Taxes on a California Wait Time Penalty I received from my previous Employer?

virtubill · ‎February 16, 2022

It is my understanding the IRS does not consider this income we need to pay taxes on but I got a 1099-MISC for it.

RobertB4444 · ‎February 17, 2022

Sorry, it's income.

The IRS does not consider California Wait Time Penalties to be WAGES, so you don't have to pay Social Security or Medicare taxes on it. But it is still income and you do need to include it on your taxes.

Go to the wages and income section and scroll down to the 1099-MISC section and enter it there. Just remember - the form did not involve work like your main job and it did not involve an attempt to earn money and you'll be all set.

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RobertB4444 · ‎February 17, 2022

Sorry, it's income.

The IRS does not consider California Wait Time Penalties to be WAGES, so you don't have to pay Social Security or Medicare taxes on it. But it is still income and you do need to include it on your taxes.

Go to the wages and income section and scroll down to the 1099-MISC section and enter it there. Just remember - the form did not involve work like your main job and it did not involve an attempt to earn money and you'll be all set.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

virtubill · ‎February 17, 2022

That makes sense, thank you for the information and the quick reply.

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Do I need to pay Federal and State Taxes on a California Wait Time Penalty I received from my previous Employer?