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 Mandatory e-pay required for high-income individual taxpayers

Senate Bill 1389 (signed by the governor on September 30, 2008) added Section 19011.5 to the Revenue and Taxation Code, requiring some taxpayers to make their tax payments using an electronic method.

Beginning January 1, 2009, personal income taxpayers whose tax liability is greater than $80,000, or who make an estimated tax or extension payment that exceeds $20,000 for taxable years beginning on or after January 1, 2009, must send the payment electronically. Once either of these conditions is met, all payments regardless of type, amount, or tax year must be remitted electronically. Electronic payment methods include Electronic Funds Withdrawal (EFW), WebPay, or credit card.

There is a one percent penalty of the amount paid unless the failure to pay electronically was for reasonable cause and not willful neglect.

Taxpayers whose tax thresholds fall below the mandatory e-pay amounts may request to discontinue making electronic payments. FTB will provide a waiver form for taxpayers to file. The waiver form will be available in March 2009.

We plan to send a courtesy letter to taxpayers who made a payment in 2008 that could qualify them for mandatory e-pay. The letter will inform these taxpayers of the law change, and that they may meet the mandatory e-pay threshold in 2009.

Check our website after November 17, 2008, for more information. Go to and search for “mandatory e-pay.”