The LA Times reported last week that yet another payday passed with erroneous paychecks for employees of the LA Unified School District (LAUSD). The number of errors have remained basically the same over the past three paydays.
The rush is on to try to fix things before the end of the year, when tax forms will be mailed out. This could prove to be a real issue for the thousands of employees who have been overpaid, who could find themselves in trouble with the US Internal Revenue Service and California tax authorities for underpaying their taxes.
The LAUSD is contemplating ".. a plan to designate overpayments as no-interest loans that would not be counted as income." I am not a certified public account (anyone out there who is?), but I would suspect that this information would still need to be reported to the IRS at least by a person receiving this income. And if so, this means at a minimum a tax preparation day headache if additional more tax forms are required to be filed.
LAUSD management "anticipated that the technological glitch at the root of the problem would be fixed before the next payday in November, but left open the possibility that it could take longer."