Katie <katiej_1...[at]yahoo.com> wrote:
- quote -

Thanks, but that does not address my question.

For federal taxes, you might still be subject to the
underpayment penalty if you did not meet the proper
conditions on each of the due dates for estimated tax
payments ("quarterly"). For example, if you make no tax
payments during the year, but pay more than 100% of your
total tax liability in December, resulting in a refund, you
are likely subject to an underpayment penalty -- unless all
of your income were in the last quarter, or you made that
more-than-100% tax payment by withholding from earned
income, ya-da-ya-da-ya-da.

But according to Calif income tax instructions, it would
appear that is not the case. The instructions clearly state
that if the "tax due" line is zero: "Stop. You are not
subject to an estimated payment penalty".

I now know that those instructions are wrong! Even though I
got a refund, I got a notice from the FTB stating that the
refund was reduced by an underpayment penalty (amount
stated).

(And no, I did not make just one tax payment in December.
That was just an extreme hypothetical to make the point.)

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"nomail1...[at]hotmail.com" <nomail1...[at]hotmail.com> wrote:

- quote -

Look at the bottom right-hand corner of page 18 of the Form
540 instructions. There is no penalty for underpayment of
estimated taxes if the total of your payments and credits
equals at least 90% of your current year liability, or 100%
(or 110% if high income) of your prior year tax liability,
or is less than $200.

These are the same as the federal rules except for the $200
exception. California generally conforms to IRC Sec. 6654,
but IRC Sec 6654(e)(1) does not apply (Cal. Rev. & Tax. Code
Sec. 19136(c) (1)). Instead, CRTC Sec. 19136(c)(2) provides
that no penalty is assessed if the total tax liability, less
payments and credits, is less than $200 ($100 for married
filing separately). So if no tax is due with the return, or
the tax due is less than $200, there is no penalty for
underpayment of estimated taxes.

Katie in San Diego

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

"nomail1...[at]hotmail.com" <nomail1...[at]hotmail.com> wrote:

- quote -

Look at the bottom right-hand corner of page 18 of the Form
540 instructions. There is no penalty for underpayment of
estimated taxes if the total of your payments and credits
equals at least 90% of your current year liability, or 100%
(or 110% if high income) of your prior year tax liability,
or is less than $200.

These are the same as the federal rules except for the $200
exception. California generally conforms to IRC Sec. 6654,
but IRC Sec 6654(e)(1) does not apply (Cal. Rev. & Tax. Code
Sec. 19136(c) (1)). Instead, CRTC Sec. 19136(c)(2) provides
that no penalty is assessed if the total tax liability, less
payments and credits, is less than $200 ($100 for married
filing separately). So if no tax is due with the return, or
the tax due is less than $200, there is no penalty for
underpayment of estimated taxes.

Katie in San Diego


<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

Does the Calif estimated tax penalty apply even if you are
due a refund, as does the federal estimated tax penalty?

Instructions for line 67 of 2006 Form 540 does not state
that explicitly, as do the instructions for line 77 of 2006
Form 1040.

On the contrary, the instructions for line 67 state that if
line 48 is less than $200 or less than 10% of line 30,
"Stop. You are not subject to an estimated payment
penalty".

Line 48 is non-zero only if you owe taxes.

I also looked at Form 5805 and it instructions, to no avail.
But I might have overlooked something.

If the Calif estimated tax penalty does apply even if you
are due a refund, I would appreciate it if you would point
me to the explanation of that fact.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >