Spidell's Tax Season Tribune

California’s arm is long, but not quite that long

By Renée Rodda, J.D.

Contributing Editor

If you’ve spent any time working in California tax law, you already know the Golden State has a, shall we say, enthusiastic approach to claiming jurisdiction over people, income, and apparently, football players who briefly passed through the state three decades ago.

But even California has limits. A court recently had to remind the state of this after Wayne Gandy — a first-round NFL draft pick in 1994 who played his rookie season with the Los Angeles Rams — filed a workers’ compensation claim in California six years after retiring, alleging cumulative injuries from his NFL career. Gandy signed his initial contract in California with the Los Angeles Rams. The catch? Gandy spent the next 14 years of his career playing for teams in Missouri, Pennsylvania, and Georgia. He played a grand total of eight games in California over his final decade in the league and practiced there occasionally.

California’s workers’ compensation law extends coverage to any employee who either signed their employment contract in California or regularly works in California, even for injuries occurring elsewhere. California’s Workers’ Compensation Appeals Board determined it had jurisdiction over Gandy’s claim against the Atlanta Falcons. One could almost hear Sacramento rubbing its hands together.

However, the Fourth District Court of Appeal determined that an out-of-state employer is exempt from California workers’ compensation under the law in cases where:

The athlete performed fewer than 20% of their duty days in California during the year preceding their last California game; and
The athlete worked more than seven seasons for non-California teams.

Gandy and the Falcons easily met both requirements.¹

So there you have it. You can leave California, build an entire career somewhere else, and still briefly wonder if California is going to send you a bill. For tax professionals, this will come as absolutely no surprise whatsoever.

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By Kathryn Zdan, EA

Editorial Director

Social Security is full of its share of tricky rules regarding benefit calculation and taxability, a topic that Spidell covers often in our various publications. Today, however, we will not determine the indexed amount for each year prior to age 60, by multiplying the amount earned (but not more than the maximum wages subject to FICA) by a ratio of the “average wage index” amount for … Zzz zzz zzz.

Instead, here are some interesting facts about the Social Security program and its history.

Ernest Ackerman of Cleveland got the first lump-sum Social Security payment for 17 cents in January 1937. Lump-sum payouts were the only form of benefits paid during the start-up period January 1937 through December 1939. Ackerman retired one day after the Social Security program began. During his one day of participation in the program, a nickel was withheld from his pay for Social Security.¹

Ida May Fuller, a retired legal secretary and stenographer from Vermont, was the first beneficiary of recurring monthly Social Security payments. On January 31, 1940, Ms. Fuller received Social Security check number 00-000-001 in the amount of $22.54 (equivalent to $518 in 2025).²

Social Security numbers issued before June 2011 were assigned in a particular structure: The first three digits are an area number, the next two digits represent a group number, and the last four digits are the serial number. Since June 2011, SSNs are assigned randomly, removing any geographic, birth/location significance. The Social Security Administration (SSA) does not reuse Social Security numbers. It has issued over 450 million since the start of the program, and it says it has enough to last several generations without reuse and without changing the number of digits.³

The SSA stops payments to those over 115 years old. To catch any deaths that may have escaped reporting, the SSA regularly checks that its oldest beneficiaries are using their Medicare benefits — if they’re not, the SSA verifies that the beneficiary is still alive. In the extremely rare cases where benefits are paid to people over 100 years old, the SSA has a policy to stop payments by age 115.⁴ Only 0.1% of Social Security benefits are paid to people over 100 years old.⁵

Sum tax puns from our readers

A few weeks ago we asked our Tax Season Tribune readers to send in their favorite tax-related puns. Here are a few that we received.

For those of you who don't think accountants can be humerus, I've got a bone to pick with you! — Zach

Old accountants never die. They just loose their balance! — J.R.

When I send birthday greetings to an accountant, I always wish them "many happy returns." — Danni

A few fun facts about this week’s writers:

Renée Rodda, J.D., when not writing, researching, and helping Spidell customers, enjoys riding horses.

Kathryn Zdan, EA, spends her non-Spidell hours on photography and watching horror films (and then sleeping with the light on). She also enjoys hiking, biking, and watching foreign films.

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