A friend of mine works for a privately owned company in California whose annual profit sharing is paid out with a certain dollar amount per each share an employee owns, after the end of the calendar year. Though I do not know the specifics of payout time, how they report company profits or if they have an actual policy laid out in a company handbook, this year the employees have not yet received their profit sharing, yet they are required by law to declare the profit sharing on their 2006 tax return and pay the taxes on it. They have been told that they will receive their K-9 (?) statement on April 15, and at best, may receive a check that covers the taxes due on their profit sharing, but that the rest would come at a later undetermined date. I may not know all the details but this sounds highly suspect to me. This is the second delay the company has announced this year. My friend has to file an extension on her tax return, because she won't get all her documentation in time to file her taxes.
1) has anyone heard of such a situation before?
2) is there a state legal requirement for how profit sharing is distributed if in the past it was distributed as one check for the entire year?
3) can they legally delay payment if they say they need the income for other company purposes?
1) has anyone heard of such a situation before?
2) is there a state legal requirement for how profit sharing is distributed if in the past it was distributed as one check for the entire year?
3) can they legally delay payment if they say they need the income for other company purposes?