Chat with an FTB Representative

Tax News
Ask the Advocate

Steve Sims, Taxpayers' Rights Advocate.

Withholding and Estimate Tax Payment Changes

This summer the California legislature again revised the estimated tax payment percentages, and also passed some clean-up legislation to clear up confusion on how wage earners with only wage withholding would meet the new estimated tax payment requirements. In the past, withholding from wages was applied by us as equal percentages (25 percent) for each quarter. Committee on Budget, 2009/10, ABX4 17, amended R&TC Section 19136 to give us explicit authority to apply wage withholding in percentages consistent with the percentages required for estimated tax payments for taxable years beginning on or after January 1, 2009. In addition, ABX4 17 also amended R&TC Section 19136.1 to eliminate the third quarter personal income tax estimated tax payment by revising the estimated tax payment percentages. Beginning January 1, 2010, the percentages are now 30 percent, 40 percent, 0, and 30 percent for the first, second, third, and fourth quarter installments.

Corporations will also be making estimated tax payments based on the new percentages of 30 percent, 40 percent, 0, and 30 percent for the first, second, third, and fourth quarter installments, respectively, for taxable years beginning on or after January 1, 2010. Corporations not required to make an estimated tax payment for the first quarter are required to make estimated tax payments of 60 percent, 0, and 40 percent for the second, third, and fourth quarter installments, respectively. Corporations not required to make estimated tax payments for the first and second quarters are required to make estimated tax payments of 70 percent, and 30 percent, for third and fourth quarter installments, respectively.

Steve Sims, EA
Taxpayers’ Rights Advocate

Follow our FTB Advocate on Twitter at twitter.com/FTBAdvocate.

Back to February 2010 Tax News