Important Information for LAFPP Retirees Filing as California Tax Filers
The California Franchise Tax Board (CFTB) is now re-validating the tax returns affected by the delayed reporting of 2015 quarterly tax information by Northern Trust, our pension benefit payment vendor. If you have previously received a Notice of Tax Return Change from the CFTB, you may receive a Second Notice of Tax Return Change, to allow your California withholding credits as claimed. This means no further action on your part should be required based on your pension tax withholdings.
We apologize for any inconvenience this issue may have caused. Northern Trust will be accountable and has implemented a secondary audit as part of its quality control measure to ensure future accurate state tax posting and oversight by its management. Northern Trust will also incur related penalties, should any be assessed by the California Franchise Tax Board.
If you have questions regarding these notices, please contact the California Franchise Tax Board at (800) 852-5711. We understand that callers may leave a call back number for the California Franchise Tax Board in order to avoid the long call wait time.
Please contact the LAFPP Retirement Services Section at (213) 279-3125 or toll free at (844) 88-LAFPP extension 93125, if you have related concerns and questions.
The following are the two distinct issues that affected our members:
ISSUE 1: Northern Trust’s submittal of the 2015 Quarter 1 and Quarter 2 tax information at the individual payee level was delayed. As of April 4, 2016, the California Franchise Tax Board has confirmed the proper posting of these quarterly taxes.
ISSUE 2: The California Franchise Tax Board is experiencing a technology issue which may have created discrepancies in tax withholding information for Quarter 2 and Quarter 4 of 2015. We were informed this issue affects many California taxpayers, regardless of the employer. Therefore, for pensioners who have other sources of income in addition to their LAFPP pension, further efforts may be necessary to resolve this issue. These efforts include providing copies of W-2s and year-end earnings statements, to substantiate the California state tax amounts withheld from all sources of income.