CA – Mandatory ePay

For taxable years beginning on or after 01/01/09, individuals are required to use electronic payment (ePay) for taxes owed to California once they have met the Mandatory ePay Threshold by:

  1. making a single estimated tax or extension payment over $20,000, or
  2. filing an original return with a total tax liability for the year over $80,000.

There are four (4) acceptable ePay methods available for individuals:

Web Pay –Direct withdrawal from your checking or savings account.  You must register for MyFTB in order to use Web Pay.  Individuals will need the following in order to register:

  1. A valid eMail address
  2. Your social security number
  3. Your first and last name as it appeared on the most recently filed California tax return
  4. Specific information from a California tax return filed in the last five years:
    • Year of the tax return
    • Filing status on the tax return
    • California adjusted gross income on the tax return

Web Pay features include:

  1. Viewing the status of payments made in Web Pay
  2. Canceling pending payments online
  3. Saving your bank account information for future payments
  4. Saving spouse/RDP information, if applicable

Electronic Funds Withdrawal on an eFiled return – Include authorization and banking information on your electronically filed tax return and FTB will make a direct withdrawal of taxes owed from your checking or savings account.

Credit Card – Schedule payments online at www.officialpayments.com  or by telephone toll-free at 800.272.9829 with a credit card through Official Payments Corporation .  You may pay: a balance due on a current year return; an extension payment; an estimated tax payment, a prior year amount due; or any bill you receive from FTB which includes an insert about credit card payments.  You may not use a credit card to pay an amended tax return or a liability that is still pending with FTB.  Official Payments Corporation charges a fee for this service; the fee is calculated as follows:

  1. 2.3% of the tax amount charged (rounded to the nearest cent), and
  2. The Minimum Fee is $1

To schedule a payment, you will need:

  1. The type of payment you are making (original return, extension, estimated tax)
  2. Your social security number (spouse’s/RDP’s social security number for joint payment)
  3. Your credit card number and expiration date.

Pay-by-Phone – Pre-register for this service by submitting Form FTB-4073.  Once approved – and after activating your account –schedule payments online at www.paycalifornia.com or by telephone toll-free at 800.554.7500.

California statute authorizes Franchise Tax Board to assess a penalty for failure to use ePay when required.  The penalty is equal to 1% of the amount paid.  If you have received a notice from FTB and a penalty has been assessed, you may be able to request abatement of the penalty if you can show reasonable cause for your actions.

Once you meet the Mandatory ePay Threshhold, you are required to make all future payments electronically regardless of the amount due.  If you feel you should no longer be subject to the Mandatory ePay Program, you may request a general or permanent waiver from the ePay requirement; you may request waiver if:

  1. You did not make an estimated tax or extension payment in excess of $20,000 during the previous tax year, or
  2. Your tax liability reported for the previous tax year did not exceed $80,000, or
  3. The amount you paid is not representative of your tax liability.

You may request waiver by submitting Form FTB 4107PC; FTB will review your request and notify you in writing of either approval or denial of your request.

8/28/2013 10:13:40 PM