November 1, 2009 Brings Increased Income and Supplemental Withholding Rates to California - 9 Oct 2009

Just
a reminder that the 2009-2010 fiscal budget for California included
several tax changes including increased supplemental and regular income
withholding requirements for wages paid between November 1, 2009 and
December 31, 2009.  The California supplemental wage
withholding rate for stock options and bonuses will increase from the
current withholding rate of 9.3% to 10.23% and the basic supplemental
wage withholding rate will increase from 6% to 6.6%.  This will effect stock options exercised, ESPP rights purchased, bonuses paid and RSUs delivered on and after November 1, 2009.   In
addition, new personal income tax withholding schedules, which increase
the regular wages withholding rate for wages paid on or after
November 1, 2009 by 10% for each tax bracket, are available online.

We
recommend that you follow-up with your payroll department to ensure the
revised California withholding schedules for regular wage payments are
fully operational for payroll runs November 1, 2009 or later and that
the supplemental wage withholding rates for California have been
updated.  You should be sure that your broker is geared up
at the new 10.23% rate for your equity plans with transactions occuring
between November 1 and December 31, 2009.  In addition,
you may wish to prepare your payroll department to receive employee
questions regarding the revised withholding requirements as well as to
accept amended Forms W-4s (the federal Employee Withholding Allowance
Certificate) and DE-4s (the California Employee Allowance Certificates).