California estimated tax installment rules front load the estimate installments by requiring the payments to be 30%, 40%, 0% and 30%, respectively, of the annual payment due. The California payment dates are the 15th of April and June (of the year for which the payments are being made) and January (of the following year), unless the 15th falls on a weekend or holiday, in which case the payment is due the first business day that follows.

California and Federal estimated tax payment requirements are different. Use Form 5805 (5805F for farmers/fishermen) for the California computation of the underpayment penalty.

The de minimis exception applies when the current or prior year’s California tax liability (including AMT and the mental health services tax but excluding lump-sum distribution tax) less withholding and credits is less than $500 ($250 if MS).

California law deems that a taxpayer’s withholding is allocated in the same manner as the estimated payments.  Thus, the withholding would be allocated as 30% paid in the 1st quarter, 40% in the second, none in quarter three and 30% in the last quarter.

The same as the Federal rule - Individuals must make timely payments of estimated tax. The general rule requires annual payments of the lesser of: (1) 90% of the current year’s tax or (2) 100% of the prior year’s tax.

(The same as the Federal rule for most filers.) - If California AGI for the previous year is over $150,000 ($75,000 if filing married separate), the required payment (does not apply to farmers or fishermen) is the lesser of: (1) 90% of their current year’s tax, or (2) 110% of the prior year’s tax liability.

Exception for Extra-High-Income Taxpayers - The prior-year-tax safe harbor cannot be used by taxpayers with an AGI of $1 million or more ($500,000 married separate). Instead, to avoid an underpayment of estimated tax penalty for California, these taxpayers’ estimated payments must be at least 90% of their expected current year tax.

With at least two-thirds of their gross income for the prior year or the current year from farming or fishing, they may:

The required estimated tax payment for farmers and fishermen is the lesser of 66 2/3% of the current year’s tax or 100% of the prior year’s tax.

Underestimated penalties are not assessed by California if:

The underpayment of estimated tax penalty does not apply for California to the extent the underpayment of an installment was created or increased by any provision of law that is enacted during and operative for the tax year of the underpayment. (This exception does not apply to federal law changes that may create a state tax underpayment.) Request a waiver of the penalty on Form 5805 (Form 5805F for farmers and fishermen).

Beginning January 1, 2011 personal income taxpayers must make their FTB payment electronically if either of the following conditions exists:    

Once either of the above conditions is met, all payments regardless of type, amount, or tax year must be remitted electronically.

Electronic payment methods include:

A payment made using a bank's online bill payment system is not an electronic payment because the bank mails a paper check to FTB, which does not meet the requirement to pay electronically.

While a taxpayer must make tax payments electronically if the e-pay criterion is met, there is no requirement that the tax return must be e-filed.

If required payments are not remitted electronically, 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 subsequently fall below the mandatory e-pay amounts may request to discontinue making electronic payments by using FTB Form 4107, Mandatory e-pay Election to Discontinue or Waiver Request.

According to the Form 540 instructions (2021), if a married couple paid joint estimated taxes but are filing separate income tax returns, either spouse may claim the entire amount paid, or each may claim part of the joint estimated tax payments. If the couple wants the estimated payments to be divided, the FTB should be notified before filing the tax returns so the payments can be applied to the proper account. The FTB will accept in writing any divorce agreement (or court-ordered settlement) or a statement showing the allocation of the payments along with a notarized signature of both taxpayers. Send statements to:

Joint Estimated Credit Allocation MS F283

Taxpayer Services Center

Franchise Tax Board

PO Box 942840

Sacramento, CA 94240-0040

If spouses/RDPs made separate California estimated tax payments and are filing a joint Form 540, combine the amounts each paid for entry on the return. Attach a statement to the front of Form 540 (follow your software’s instructions if e-filing) explaining that estimated payments were made under both SSNs.

Estimated tax payments aren’t required of a nonresident or new resident of California in 2022 that did not have a California 2021 tax liability (California Personal Income Tax Booklet 2021, page 16).