California law mandates electronic payments (e-pay) of estimated taxes. The law requires you to e-pay all future payments once you:
- Make an estimated tax or extension payment (by check-electronic method) over $20,000 for a taxable year beginning on or after January 1, 2009; or
- File an original return with a tax liability over $80,000 for a taxable year beginning on or after January 1, 2009.
After meeting either of these conditions, you must e-pay all future payments regardless of type, amount, or tax year. E-payment methods include the CA Franchise Tax Board (FTB) Web Pay, electronic funds withdrawal (EFW) when e-filing, credit card, or pay-by-phone. See the FTB website for details on payment options.
If your client’s met the e-pay threshold:
- Go to the Input Return tab.
- Select General.
- Select Misc. Info/Direct Deposit.
- Select the CA tab.
- Under California Miscellaneous, select the box labeled Requires electronic payments.
After selecting the box, the program will add a reminder in the client letter instructing them to e-pay any balances due to the state, including quarterly estimate installments. The program will also suppress Form 540-ES and possibly Form 540-V. See the related topics below for information on transmitting EFW payments to the state directly through ProConnect Tax.
