MyFTB accountTax News April 2024
Welcome to Tax News
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Overview
Tax News is a monthly online publication to inform tax professionals, taxpayers, and business owners about state income tax laws; Franchise Tax Board (FTB) regulations, policies, and procedures; and events that may impact or provide valuable information for the tax professional community.
We also periodically release Tax News Flashes to quickly notify subscribers of urgent time-sensitive information.
In this edition April 2024
- Activate Middle - Class Tax Refund Debit Cards
- Wait Times and Refund Information
- Single-Member LLCs Required to File Form 568
- Available Resources for Small Business Owners
- New How-to Videos Launch - Learn How to Submit a Power of Attorney in MyFTB
- New Real Estate Withholding YouTube Available
- Internal Revenue Service (IRS) Updates and More
- Ask the Advocate
Activate Middle-Class Tax Refund Debit Cards
The Middle-Class Tax Refund (MCTR) program distributed over 16.8 million payments to provide relief to Californians. Many Californians used these funds to put food on their table, gas in their vehicle, and pay for other necessities. Still, there are some MCTR debit card recipients who have not yet activated their MCTR cards or who have not used their MCTR funds.
MCTR debit card recipients who have not activated their cards will receive an activation reminder letter that includes instructions to activate their debit card. Funds are available for a limited time and must be used before the program expires on April 30, 2026.
To activate a MCTR debit card, call 1-800-240-0223. When activated, the debit card contains a one-time relief payment from the state of California. Once a debit card is activated, funds can be withdrawn for free at in-network ATMs or transferred directly to a personal bank account.
If a MCTR debit card is lost, call 1-800-240-0223, choose the option for a replacement, lost or stolen card, and follow prompts as requested.
MCTR debit card recipients who activated their debit card, but have not completely spent all available funds, are encouraged to use their funds before the program expires.
Customer service representatives are available to assist Monday-Friday, from 8 AM to 5 PM PST.
Visit mctrpayment.com for additional information about MCTR debit cards, including in-network ATM locations.
Wait Times and Refund Information
To better serve the tax practitioner community and provide resources to assist you with the information you need, we provide the following links for the best times to contact FTB, real-time refund, and general contact information.
Single-Member LLCs Required to File Form 568
As we move through another filing season for the small business community, remind your single-member limited liability company (SMLLC) clients they must file Form 568. An SMLLC that is disregarded for federal tax purposes, is also disregarded for California tax purposes, and generally files their federal taxes using a Schedule C. The exception for the first year no longer applies after January 1, 2024. RTC section 17941, subdivision (g)(1) provides that an LLC doing business in California that organizes or registers with the Secretary of State on or after January 2021, and before January 1, 2024, is not subject to the tax for its first taxable year.
SMLLCs should also be aware, however, California law states the separate existence of the eligible business entity is not disregarded for purposes of the:
- LLC tax
- LLC fee
- LLC return filing requirement
Generally, if an SMLLC is owned by an individual or a non-PTE, the return due date is the 15th day of the 4th month after the close of tax year. If an SMLLC is owned by a PTE, the return due date is the 15th day of the 3rd month after the close of tax year. Although, California grants an automatic extension of time to file a return, it does not grant an extension of time to pay the LLC tax or fee.
- File a tax return (Form 568)
- Pay the LLC annual tax
- Pay the LLC fee (if applicable)
Go to Due dates for Businesses for more information.
Available Resources for Small Business Owners
Your small business clients may need assistance to navigate difficult decisions. You can direct them to informative websites and publications where they can find answers to common questions.
Websites
- FTB – We provide a Business link to filing information for the different forms of business ownership. It also includes information on Doing Business in California and important. There is Business help that includes Revivor information if a business is suspended, and links for information on how to dissolve or cancel a business entity. Convenient online services such as Web Pay can also be found there.
- The California Office of the Small Business Advocate (CalOSBA) – features a business learning center, quick start guides, and links to financial assistance. If you or your client is in need of permit assistance, CalGold can point you in the right direction of what permits and licenses you may need for your business and location.
- California Secretary of State (SOS) – provides a Business section to access all public records for an entity, to start or dissolve/cancel a business entity, and even file statements of information online.
- Small Business Assistance Center – a great resource located at California Tax Service Center or taxes.ca.gov. Sponsored by the state of California.
Education and Outreach Events
The following two event calendars can be used to find upcoming Small Business Education and Outreach events near you.
- FTB Event Calendar – Shows public events and small business seminars.
- CDTFA Event Calendar – Shows small business seminars, new business orientation, basic sales and use tax classes, and nonprofit seminars.
Publications
- FTB 1123, Common Forms of Ownership – Provides an understanding of the different types of filing requirements and business ownership.
- FTB 984, Common Business Expenses – Provides insights to the most common business expenses.
- FTB 3556, General LLC Information – Specifically highlights limited liability companies and how they are considered hybrid business entities that take characteristics from corporations and partnerships.
- FTB 1060, Guide for Corporations Starting Business in California – Helps understand the filing requirements of corporations.
New How-to Videos Launch – Learn How to Submit a Power of Attorney in MyFTB
FTB will release new How-to Videos in the upcoming months to educate and enhance the current self-help options currently available for you.
FTB’s first video is now available for How-To Submit a Power of Attorney in MyFTB.
If you do not have a tax professional MyFTB account, you can create a MyFTB account.
Be sure to check back each month for FTB’s latest How-To videos!
New Real Estate Withholding YouTube Available
A YouTube video on Real Estate Withholding on an Installment Sale is now available.
The video covers the following:
- Withholding requirements
- Certifications
- Withholding calculations on installment payments
- Withholding during escrow
- Withholding after escrow
- How to elect out of withholding
- How to notify Franchise Tax Board of changes
Internal Revenue Service (IRS) Updates and More
We partnered with the IRS to provide monthly IRS articles to assist our tax professional and small business communities. We are excited to share this information; however, if you have questions about the content, you will need to contact the IRS directly.
IR-2024-66, March 7, 2024 —IRS will open 70 Taxpayer Assistance Centers (TACs) on Saturday, March 16, from 9 a.m. to 4 p.m., to provide in-person help across the nation.
IR-2024-65, March 6, 2024 — Amid concerns about people being misled, the IRS reminded taxpayers and heath spending plan administrators that personal expenses for general health and wellness are not considered medical expenses under the tax law.
IR-2024-63, March 6, 2024 — IRS reminds taxpayers they’re generally required to report all earned income on their tax return, including income earned from digital asset transactions, the gig economy and service industry as well as income from foreign sources.
Treasury, IRS issue guidance for the elective payment of advanced manufacturing investment credit
IR-2024-62, March 5, 2024 — IRS issued final regulations that provide guidance for the entities choosing the elective payment for the advanced manufacturing investment credit, established by the CHIPS Act of 2022.
IR-2024-61, March 5, 2024 — The Department of the Treasury and IRS issued final regulations for applicable entities that earn certain clean energy credits and choose to make an elective payment election
IR-2024-60, March 4, 2024 —IRS reminded those who may be entitled to the COVID-era Recovery Rebate Credit in 2020 that time is running out to file a tax return and claim their money.
IR-2024-59, March 4, 2024 — IRS announced registration for the agency’s 2024 Nationwide Tax Forum is now open, providing tax professionals the opportunity to attend special continuing education sessions this summer in five cities across the nation.
IRS: Never mind the myths; know the facts about receiving a Form 1099-K in 2024
IR-2024-57, March 1, 2024 — To help taxpayers with filing, IRS debunked some common myths to help taxpayers understand what to do with Form 1099-K.
IRS Free File now available; free service through IRS.gov available for millions of taxpayers
IR-2024-10, Jan. 12, 2024 — The IRS announced that IRS Free File Guided Tax Software service is ready for taxpayers to use in advance of the opening of tax season later this month.
Ask the Advocate: Last Minute Filing Tips
Angela Jones, Taxpayers' Rights Advocate
As we enter the final stretch up to the April 15 filing deadline, I know you are all busy burning the midnight oil preparing tax returns. Tax season is a busy time for FTB too. I thank the FTB customer contact center staff as they work very long hours providing service to all of you. FTB staff is also working diligently to accurately process returns and issue refunds as soon as possible.
Update Client Information
Speaking of accurate processing, now is a good time to ensure your client’s address and banking information is up to date. FTB receives a large volume of returned mail every year due to returns filed with inaccurate or stale addresses. While most taxpayers receive electronic direct deposit refunds, there are still times when a refund check is sent to the wrong address simply because the taxpayer failed to let their tax preparer or FTB know that they moved. An incorrect bank account number may result in an electronic refund deposited into the wrong taxpayer’s account. Spend a few minutes to ensure your client’s information is up to date and save yourself future headaches.
Payments
FTB reminds taxpayers to submit separate tax payments when making payments covering two tax years to avoid unintended notices, penalties, and potential erroneous refunds. Personal income tax payments should be made separate from business entity tax payments, and from pass-through entity elective payments.
San Diego Disaster Extension
If your client’s principal residence or place of business is in San Diego County, they are an affected taxpayer and entitled to relief. No supporting documentation is required. This applies to individual returns and taxes that are due on April 15, 2024, and calendar-year business entity (including tax-exempt organizations) returns and taxes that are due on March 15, 2024, April 15, 2024, or May 15, 2024.
Taxpayers should write the name of the disaster (for example, San Diego Flood) in blue or black ink at the top of their tax return to alert FTB. If taxpayers are filing electronically, they should follow the software instructions to enter disaster information.
Help with San Diego County flood relief
As of January 2024, File CA Form 109 Electronically
The CA business e-file program will now allow charities and non-profits filing Form 109, California Exempt Organization Business Income Tax Return, to file returns electronically.
Contact your software provider to determine if they support the ability to e-file CA Form 109 Exempt Organization Business Income Tax returns.
MyFTB Password Tips
Your password must:
- Be 15 to 32 characters.
- Include both upper case and lower-case letters.
- Include at least one a number.
- Include a special character.
- Not include the username.
- Not use common words, such as “password”.
- Not contain more than 3 consecutive or repeating characters.
- Passwords are case sensitive.
Great Reference Publication
FTB Publication 1006 California Tax Forms and Related Federal Forms provides:
- A list of FTB forms and descriptions and their federal counterparts.
- The ability to cross-reference forms starting with either a California or federal form/schedule number.
- Whether a federal form may be used for California purposes.
- Forms used by individuals or the different business entities.
Celebrate Your Hard Work
In closing, I hope your remaining tax season goes smoothly. After the last return is filed on April 15, take a moment to acknowledge and celebrate your accomplishments, recharge, and take a break amidst all the hustle and bustle.