Thank you for the thoughtful response. I'm not sure how the FTB caught it as it shows up as the lesser amount on the state wages. I would normally have the client pay for this kind of amount, but the issue comes up every year so if the FTB made an adjustment for this year, the FTB would continue making adjustments for future years as well. I'll ask the client for the plan policy and see if I can get further clarification.

Thank you!