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Estate Income Tax Clearance Requirement Eliminated

Purpose of Bulletin

To advise staff of the provisions of Assembly Bill (AB) 672, chaptered September 6, 2013.

Background

Beginning January 1, 2014, estates that meet certain appraised value and beneficiary distribution criteria will no longer need to obtain an income tax clearance certificate from us to allow the final accounting from the fiduciary by the probate court.

As a result, California no longer requires any estate to obtain a Tax Clearance Certificate.

Affected Entities

Estate entities with an appraised value in excess of $1 million (at the date of the decedent’s death) and aggregate distributions to nonresident beneficiaries in excess of $250,000.

Specific Provisions

Beginning January 1, 2014:

  • Eliminates the estate income tax clearance requirements for estates that have an appraised value in excess of $1 million and aggregate distributions to nonresident beneficiaries in excess of $250,000.
  • Removes our authority to provide estate income tax clearance certificates and any related expedited processing services.
  • Eliminates form FTB 2571, Personal Income Tax Clearance Certificate.
  • Eliminates form FTB 3571, Request for Estate Income Tax Clearance Certificate.
  • Renders our Public Service Bulletin (PSB 05-07) Estates- New Fee for Specialized Services obsolete.

Estate Income Tax Clearance Requests

Requests Received Prior to January 1, 2014
Estate income tax clearance requests received prior to the effective date of AB 672 will be processed under the existing law provisions.

Requests Received On or After January 1, 2014
Estate income tax clearance requests received on or after the effective date will not be processed.

However, requests received on or after the effective date will be returned to the sender with a letter explaining the repeal of the estate income tax clearance requirements for specified estates with nonresident beneficiaries.

Forms and Publications

The following form and bulletin will be obsolete and removed from our public website to reflect the changes made by AB 672:

  • FTB 3571, Request for Estate Tax Clearance Certificate and instructions.
  • PSB 05-07, Estates-New fee for Specialized Services.