SB 1389 (enacted September 30, 2008) added Section 19011.5 to the Revenue & Taxation Code, requiring some taxpayers to make their tax payments using an electronic method. See http://www.ftb.ca.gov/individuals/Mandatory_e-pay.shtml.
Beginning January 1, 2009 personal income taxpayers whose tax liability is greater than $80,000 or who make an estimated tax or extension payment that exceeds $20,000 for taxable years beginning on or after January 1, 2009, must send the payment electronically. Once either of these conditions is met, all payments regardless of type, amount, or tax year must be remitted electronically. Electronic payment methods include Electronic Funds Withdrawal (EFW), Web Pay, or Credit Card.
There is a one percent penalty of the amount paid unless the failure to pay electronically was for reasonable cause and not willful neglect.
Taxpayers whose tax thresholds fall below the mandatory e-pay amounts may request to discontinue making electronic payments. In March 2009, FTB will provide a waiver form for taxpayers to file.
On December 1, the Franchise Tax Board sent courtesy letters (http://www.ftb.ca.gov/forms/misc/4105MEO.pdf) to taxpayers who made a payment in 2008 that could qualify them for mandatory e-pay. The letter informed these taxpayers of the law change, and that they may meet the mandatory e-pay threshold in 2009.
AB 583 (Hancock, Stats. 2008, Ch. 735): Establishes the Fair Elections Fund and places the Voters Fair Elections Fund as a voluntary contribution designation on the personal income tax return beginning with the 2008 return.
AB 1452 (Committee on Budget, Stats. 2008, Ch. 763): Does the following:
* Suspends net operating loss (NOL) deductions for two years, makes the NOL carryover period 20 years, and allows taxpayers a two-year carryback for NOLs from 2011 and later.
* Authorizes FTB to conduct a tax amnesty for the 2003 through 2006 taxable years for corporation and personal income taxpayers. (Repealed by SBX1 28.)
* Requires a limited liability company (LLC) to estimate and pay its LLC fee by a specific date. (Clarified by SBX1 28.)
* Limits the amount of tax credits that may reduce tax for two years, and allows tax credits to be assigned among members of a combined reporting group under the Corporation Tax Law. (Clarified by SBX1 28.)
AB 2249 (Niello, Stats. 2008, Ch. 234): Allows a taxpayer to recover an income tax refund that they misdirected to the wrong bank account. Also allows FTB, where necessary, to use its assessment and collection powers to get a misdirected refund back from a third-party who is the unintended recipient of a misdirected refund.
AB 3078 (Assembly Revenue & Taxation Committee, Stats. 2008, Ch. 305): Does the following:
* Allows entities to file a tax return on behalf of certain nonresidents.
* Closes loopholes in current tax withholding on the payments that nonresident individuals and non-California businesses receive from the sale of California real property.
* Extends the statute of limitations for claiming the credit for taxes paid to another state.
* Gives discretionary authority to the Taxpayers' Rights Advocate to grant relief from penalties, fees, or interest imposed on a taxpayer because of erroneous actions of the department.
* Increases the Personal Income Tax estimated tax penalty threshold.
* Clarifies the rules for the elimination from income of certain dividends received.
SBX1 28 (Senate Budget Committee, Stats. 2008, First Ex. Sess. 2007-2008, Ch. 1): Does the following:
* Accelerates the amount of estimate tax payments required to be made for taxable years beginning on or after January 1, 2009, and eliminates the option for certain taxpayers to use last year’s income tax in calculating estimate payment requirements for current year.
* Repeals Tax Amnesty provisions and penalty, as enacted in AB 1452.
* Enacts a new corporation tax penalty for understatements of tax in excess of $1 million for taxable years beginning on or after January 1, 2003.
* Clarifies the operative date for the requirement to estimate and pay the limited liability company fee of taxable years beginning on or after January 1, 2009.
* Clarifies legislative intent on business tax credit assignment language in AB 1452 for purposes of proper implementation of that section.
SB 797 (Ridley-Thomas, Stats. 2008, Ch. 33): Requires income tax returns prepared by an employee of an exempt tax preparer to be signed by either of the following:
* An exempt tax preparer (Certified Public Accountant, Attorney, or Enrolled Agent).
* A tax preparer that is registered with the California Tax Education Counsel.
SB 1055 (Machado, Stats. 2008, Ch. 282): Allows taxpayers to exclude up to $250,000 of cancellation-of-debt income that results from a discharge of a loan that was used to acquire, construct, or substantially improve the principal residence of the taxpayer. The maximum amount of a loan eligible to be excluded is $800,000, and the exclusion is phased-out for discharged loans that exceed $800,000.
SB 1285 (Corbett, Stats. 2008, Ch. 711): Requires FTB to establish appraisal standards and requirements for the purpose of substantiating the amount of charitable contributions claimed by a seller for conservation land acquired using state funds".
Beginning January 1, 2009 personal income taxpayers whose tax liability is greater than $80,000 or who make an estimated tax or extension payment that exceeds $20,000 for taxable years beginning on or after January 1, 2009, must send the payment electronically. Once either of these conditions is met, all payments regardless of type, amount, or tax year must be remitted electronically. Electronic payment methods include Electronic Funds Withdrawal (EFW), Web Pay, or Credit Card.
There is a one percent penalty of the amount paid unless the failure to pay electronically was for reasonable cause and not willful neglect.
Taxpayers whose tax thresholds fall below the mandatory e-pay amounts may request to discontinue making electronic payments. In March 2009, FTB will provide a waiver form for taxpayers to file.
On December 1, we sent courtesy letters to taxpayers who made a payment in 2008 that could qualify them for mandatory e-pay. The letter informed these taxpayers of the law change, and that they may meet the mandatory e-pay threshold in 2009.
AB 583 (Hancock, Stats. 2008, Ch. 735): Establishes the Fair Elections Fund and places the Voters Fair Elections Fund as a voluntary contribution designation on the personal income tax return beginning with the 2008 return.
AB 1452 (Committee on Budget, Stats. 2008, Ch. 763): Does the following:
* Suspends net operating loss (NOL) deductions for two years, makes the NOL carryover period 20 years, and allows taxpayers a two-year carryback for NOLs from 2011 and later.
* Authorizes FTB to conduct a tax amnesty for the 2003 through 2006 taxable years for corporation and personal income taxpayers. (Repealed by SBX1 28.)
* Requires a limited liability company (LLC) to estimate and pay its LLC fee by a specific date. (Clarified by SBX1 28.)
* Limits the amount of tax credits that may reduce tax for two years, and allows tax credits to be assigned among members of a combined reporting group under the Corporation Tax Law. (Clarified by SBX1 28.)
AB 2249 (Niello, Stats. 2008, Ch. 234): Allows a taxpayer to recover an income tax refund that they misdirected to the wrong bank account. Also allows FTB, where necessary, to use its assessment and collection powers to get a misdirected refund back from a third-party who is the unintended recipient of a misdirected refund.
AB 3078 (Assembly Revenue & Taxation Committee, Stats. 2008, Ch. 305): Does the following:
* Allows entities to file a tax return on behalf of certain nonresidents.
* Closes loopholes in current tax withholding on the payments that nonresident individuals and non-California businesses receive from the sale of California real property.
* Extends the statute of limitations for claiming the credit for taxes paid to another state.
* Gives discretionary authority to the Taxpayers' Rights Advocate to grant relief from penalties, fees, or interest imposed on a taxpayer because of erroneous actions of the department.
* Increases the Personal Income Tax estimated tax penalty threshold.
* Clarifies the rules for the elimination from income of certain dividends received.
SBX1 28 (Senate Budget Committee, Stats. 2008, First Ex. Sess. 2007-2008, Ch. 1): Does the following:
* Accelerates the amount of estimate tax payments required to be made for taxable years beginning on or after January 1, 2009, and eliminates the option for certain taxpayers to use last year’s income tax in calculating estimate payment requirements for current year.
* Repeals Tax Amnesty provisions and penalty, as enacted in AB 1452.
* Enacts a new corporation tax penalty for understatements of tax in excess of $1 million for taxable years beginning on or after January 1, 2003.
* Clarifies the operative date for the requirement to estimate and pay the limited liability company fee of taxable years beginning on or after January 1, 2009.
* Clarifies legislative intent on business tax credit assignment language in AB 1452 for purposes of proper implementation of that section.
SB 797 (Ridley-Thomas, Stats. 2008, Ch. 33): Requires income tax returns prepared by an employee of an exempt tax preparer to be signed by either of the following:
* An exempt tax preparer (Certified Public Accountant, Attorney, or Enrolled Agent).
* A tax preparer that is registered with the California Tax Education Counsel.
SB 1055 (Machado, Stats. 2008, Ch. 282): Allows taxpayers to exclude up to $250,000 of cancellation-of-debt income that results from a discharge of a loan that was used to acquire, construct, or substantially improve the principal residence of the taxpayer. The maximum amount of a loan eligible to be excluded is $800,000, and the exclusion is phased-out for discharged loans that exceed $800,000.
SB 1285 (Corbett, Stats. 2008, Ch. 711): Requires FTB to establish appraisal standards and requirements for the purpose of substantiating the amount of charitable contributions claimed by a seller for conservation land acquired using state funds
