Mandatory e-pay for CA Taxpayers with +$80K of Tax Per Year

Ron Cohen, CPA, MST By Ron Cohen, CPA, MST
Greenstein, Rogoff, Olsen & Co., LLP

Update: 11/10/09:

The FTB now has a pay-by-phone option available. See:

That Franchise Tax Board (FTB) has begun mailing notices (FTB 4106 MEO) to taxpayers who meet the mandatory e-pay threshold. The new mandatory e-pay law requires taxpayers to remit their payments electronically if their tax liability exceeds $80,000, or they made estimated tax or extension payment exceeding $20,000. The first payment that would trigger the mandatory e-pay requirement is the 2009 taxable year first quarter estimate that was due April 15, 2009. This first payment did not have to be made electronically, but all future payments should be made electronically. For the 2009 calendar year the FTB will not impose the mandatory e-pay penalty (1% of the amount paid) to allow taxpayers and practitioners additional time to implement practices and procedures to comply with the requirement. (FTB e-file News, 05/05/2009)

Electronic Payment Methods

Make your tax payment using one of the following methods:

  • Pay online with Web Pay.
  • Request an Electronic Funds Withdrawal (EFW) on your e-file return.  [From GROCO:  This needs to be set-up with your tax return preparer..]
  • Pay by credit card.

A pay-by-phone option will be available in July 2009.

You may only send tax payments due to the Franchise Tax Board electronically using one of the methods above. If you owe tax to other agencies that require an electronic payment, you must make those payments directly to them.

NOTE: Making a payment using your bank’s online bill payment system is not an electronic payment. Your bank mails a paper check to FTB which does not meet the requirement to pay electronically.

For the complete story of e-pay, please see the FTB’s website at the link below.

I am always available for questions or comments at (510) 797-8661 x237.

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