COVID-19 frequently asked questions for tax relief and assistance

General

What special tax relief provisions related to COVID-19 are now expired?

The following special tax reliefs offered from March 12, 2020 through July 15, 2020 have expired:

  • Various Extensions to file and pay deadlines
  • Delayed collection action for:
    • Personal income tax
    • Business entity tax
    • Non-tax debt programs
  • The suspension of:
    • Income tax refund offsets
    • Monthly payments for installment agreements
    • Non-filer compliance activities
  • Extended time to protest or appeal an audit notice

We have additional resources available if you are experiencing a financial hardship, such as payment plans. If you need more information, contact us. If you have a letter, call the number on your letter for assistance.

Can I visit one of your Field Office Public Counters to make a payment or for tax help?

Starting February 1, 2021, all of our Field Office Public Counters in Los Angeles, San Diego, Santa Ana, Oakland and Sacramento are open by appointment only.

You can request an appointment in one of the following ways:

  1. Send an email to FTBFieldOfficeAppointments@ftb.ca.gov and include the following:
    • The location of the Field Office in the subject line of your email
    • Your name and phone number
    • Reason for appointment
  2. Contact the field office using the phone numbers listed on our Office Locations page.

We will contact you within two business days of receiving your request.

If you need help, use our website to find your answer online. If you need to make a payment, visit Pay by bank account (Web Pay). If you have a MyFTB account, you can also log in and make a bank account payment through Web Pay.

Walk-through revivor

We are also processing requests for walk-through revivors remotely. We should be able to provide the revivor within 24 hours when the requirements are met. Contact us at (888) 635-0494 or use our Revivor Assistance Request Form for further assistance.

Thank you for your patience during this challenging time.

Are there any free tax preparation sites open during the COVID-19 Pandemic?

Most Volunteer Income Tax Assistance (VITA) locations are closed during the pandemic. However, there are a limited number of locations around the state that continue to operate either virtually or in-person with an appointment.

Visit our Get free tax help page and use our VITA/TCE locator for updated information on available sites and hours.

Are there any free online tax preparation options available for taxpayers while VITA locations are closed?

Yes, taxpayers, can file their federal tax return online for free using the IRS Federal Free File program.

Taxpayers can file their California state tax return online using our free CalFile program.

CalFile is fast, easy, and free. It uses a simple step-by-step fill-in-the-blank process to complete the state tax return. Registration is not required to use CalFile and taxpayers are able to claim both CalEITC and the Young Child Tax Credit (YCTC) using the program.

FTB also has a list of other free online tax preparation options.

COVID-19 Economic impact payments

Does California conform to IRS Notice 2020-46 regarding the exclusion from income of sick, vacation, or personal leave that employees elect to forgo in exchange for cash payments made by employers to charitable organizations that provide relief to victims of the COVID-19 pandemic?

Yes, the value of leave donated in exchange for amounts paid before January 1, 2021, to organizations that aid victims of COVID-19 is excludable from an employee’s income for California income tax purposes. Electing employees may not claim a charitable deduction for the value of the donated leave.

Are the payments that individuals received in 2020, from the federal government (i.e., $1,200 [$2,400 for individuals filing a joint return] and $500 per qualifying child) under the federal CARES Act or the $600 payments individuals receive from the federal government under the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 subject to California income tax?

No, these payments are not subject to California income tax.

Is the emergency increase in unemployment compensation benefits (in the amount of $600 per week) that individuals received in 2020, under the federal CARES Act or the increase of $300 per week that individuals receive in unemployment compensation benefits under the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 subject to California income tax?

No, these payments are not subject to California income tax.

Are the modifications for net operating losses (NOLs) in the federal CARES Act applicable for California income and franchise tax purposes?

No, these modifications for NOLs do not apply for California income and franchise tax purposes.

Does California conform to the federal early withdrawal penalty waivers for distributions from qualified retirement accounts under the recently enacted federal CARES Act?

Yes, the federal early withdrawal penalty waivers for distributions from qualified retirement accounts under the federal CARES Act also applies for California income tax purposes.

Where can I go for more information on the federal stimulus payment?

The IRS will post additional updates on their Coronavirus Tax Relief and Economic Impact Payments page.  

Collection Actions

Will you suspend monthly payments for payment plans (installment agreements)?

Existing payment plans

If you currently can’t comply with the terms of an existing installment agreement (payment plan), you may request to skip your payments. You can request to skip payments online or by phone at (800) 689-4776.

For court-ordered debt installment agreements, you can request to skip payments online by logging into your court-ordered debt account or by phone at 916-845-4064.

New payment plans

You can apply for a payment plan if you’re unable to fully pay your state taxes (as usual). If you have court-ordered debt, you can also apply for a payment plan. You can apply online, by phone, or mail. For more information:

Can I get my tax lien released?

We will work with taxpayers impacted by COVID -19 that have liens filed and are trying to secure financing to cover payroll, pay off their debts, etc.

When you contact us, we will perform a case-by-case evaluation. This will allow us to do the following:

  • Evaluate each situation
  • Determine whether the lien release would be in the best interest of you and the state

Program areas will work with you to request any needed documentation, and make a determination. If we determine a lien release is appropriate, we will assist with submitting the lien release to the appropriate county (ies).

Estimate payments

If you made a combined estimated tax payment for the first and second quarter that was due on or before July 15, 2020, and it was more than $20,000, you must make all future payments to us electronically. You may request a waiver of this electronic payment requirement by completing FTB 4107. Visit Mandatory e-Pay for individuals for more information.

Original signatures for paper returns and other documents

Scenario: FTB indicated they would accept other types of signatures on paper returns or other documents that need to be filed with an original signature through June 30, 2021. Will FTB extend these options beyond June 30, 2021?

Answer: Yes. For paper returns and other documents that must be signed with an original signature by you and/or your tax representative, we will not require an original signature through December 31, 2021, except for Power of Attorneys (POAs).

We will accept 2 signature alternative methods for paper returns:

  • Method 1: An attached document that must be included with the filed return that provides a copy of the original signature. The attached document should:
    • Identify what the document signature is for (Example: Corp XX, 2019 Form 100)
    • State “Refer to the attachment for a copy of the original signature” on the signature line
  • Method 2: A paper return with a faxed signature on the signature page

For all other documents, except POAs, filed with us that require an original signature, we will accept documents with photographed or digital copies of required signatures.

You can also upload a document with a signature into MyFTB. Please note that only PDF and Excel documents are currently accepted.

These temporary procedures that are available through December 31, 2021, do not apply to filing a POA. Follow the procedure on Submit a power of attorney if you need to submit a POA to us.

Teleworking and the “Stay at Home” order

About the “Stay at Home” Executive Order (N-33-20)

On March 19, 2020, California Governor Gavin Newsom issued Executive Order N-33-20 in response to the COVID-19 pandemic. The public health directives required all residents to stay at home in order to prevent the spread of the virus. As a result, many individuals living in California who ordinarily did not telework from their homes began to do so. In some instances, the individuals living in California that were now teleworking from their homes might be employed by corporations that previously had no connections with California.

The following FAQs provide guidance as to the possible California franchise tax implications to corporations that previously had no connections with California but now have an employee indefinitely teleworking from California due to the Governor's Executive Order. The responses to the FAQs are applicable until the Governor's Executive Order is no longer in effect.

Will California treat a corporation that had no previous connections with California as doing business if it has an employee who is currently teleworking in California due to Executive Order N-33-20?

No. California will not treat an out-of-state corporation whose only connection to California is the presence of an employee who is currently teleworking in California due to Executive Order N-33-20 as being actively engaged in a transaction for the purposes of financial or pecuniary gain or profit. Also, California will not include the compensation attributable to an employee who  is currently teleworking due to Executive Order N-33-20 in the minimum payroll threshold set forth in California Revenue & Taxation Code section 23101(b)(4).

For California franchise tax purposes, what is doing business?

For California franchise tax purposes, corporations are required to file a tax return and are subject to the minimum franchise tax if they are doing business in California. "Doing business" means that a corporation has sufficient connections to California so that the corporation has availed itself of the benefits provided by the state that it can be fairly subject to the taxing authority of the state. Visit Doing business in California for more information.

What activities might result in a corporation being considered as doing business in California?

Generally, a corporation will be considered as doing business in California if the corporation has actively engaged in any transaction for the purpose of financial or pecuniary gain or profit. Accordingly, the corporation's connections to California do not need to be extensive in order for it to be considered as doing business for California franchise tax purposes. If the minimum thresholds for sales, property and payroll attributed to California are exceeded, a corporation will be considered as doing business in California. 

For California franchise tax purposes, what is Public Law 86-272?

Public Law (PL) 86-272 states that if an out-of-state corporation sells tangible personal property in a jurisdiction and its employees' only activity in that jurisdiction pertains to the solicitation of sales, the out-of-state corporation will not be subject to tax on the income it generates in the jurisdiction. In Wisconsin Dept. of Revenue v. Wm. Wrigley Jr. Co., (1992) 505 U.S. 214, the United States Supreme Court held that even if an out-of-state corporation engaged in activities that exceeded the solicitation of sales, as long as they were de minimis, the out-of-state corporation will continue to not be subject to tax on the income it generates in the jurisdiction. Visit Public Law 86-272 for more information.

Will California treat an out-of-state corporation as exceeding the protections of PL 86-272 for California franchise tax purposes if it has an employee who is currently teleworking in California due to Executive Order No. 33-N-20?

No. California will treat the presence of an employee who is currently teleworking in California due to the Governor's Executive Order as engaging in de minimis activities for purposes of P.L. 86-272 protection.

Out-of-state employers and employment taxes

Visit EDD’s COVID-19 FAQs: Employer information for information about an out-of-state employer’s liability for employment taxes on an employee’s wages earned while temporarily performing services in California during the COVID-19 pandemic.

Will the rescission of Executive Order N-33-20, by Executive Order N-07-21, change how California determines whether an out of state corporation is considered to be “doing business” in California and whether it is protected by Public Law 86-272 when the corporation has an employee teleworking in California?

Yes, with the rescission of Executive Order N-33-20, an out of state corporation may now be considered to be “doing business” in California, and may not be protected by Public Law 86-272, depending on the teleworking activities of the corporation’s employee.

Residency and income sourcing

Your filing requirement and residency status (resident or nonresident) for your 2020 California personal income tax returns during COVID-19

When determining your filing requirement and residency status for 2020 California personal income tax returns, you should consider circumstances related to COVID-19.

If you are physically present in California for at least nine months you are presumed to be a resident of California for purposes of the California personal income tax under CRTC § 17016.

However, actions you took related to COVID-19 and Governor Newsom's Executive Order N-33-20, should be weighed when evaluating whether to file a California resident return. The determination of whether an individual is in (or out) of California for other than a temporary or transitory purpose is dependent to a large extent on the facts and circumstances of each particular case (Cal. Code Regs., tit. 18, § 17014(b)).

Your actions based on COVID-19 may establish facts and circumstances that support a determination of whether you are in (or out) of California for other than a temporary or transitory purpose. How much weight should be attributed to your actions related to COVID-19 may vary depending on other facts or factors.

In the Appeal of Stephen Bragg, 2003-SBE-002 (May 28, 2003) some 19 factors were identified, including physical presence, property interests and family abode. The factors identified in Bragg were neither exhaustive nor exclusive. In reviewing the weight to be attributed to an individual's actions related to COVID-19, in addition to the factors described in Bragg, the following non-exhaustive facts/factors might be relevant:

  • When the individual entered California
  • Whether the individual remained in California after the COVID-19 period (and if so, how long)
  • Whether the individual remained in California throughout the COVID-19 period
  • Whether the individual provided COVID-19-related services in California
  • Whether the individual cared for an at-risk family member or friend

Income sourcing for nonresidents temporarily relocated to California, and filing and paying California income taxes during COVID-19

Scenario 1: You work for an out-of-state employer and receive a W-2 from them. You temporarily relocate to California. Do you need to file a California return and pay California income tax?

Answer: Yes. As a nonresident who relocates to California for any portion of the year, you will have California source income during the period of time you performed services in California. You will need to file a California Nonresident or Part-Year Resident Income Tax Return (Form 540NR) return to report the California sourced portion of your compensation. One way to calculate the portion of your income that is California sourced is to multiply your total amount of income for the year by a ratio of your total number of days performing services in California over your total number of days performing services worldwide.

Scenario 2: You work for a California employer and receive a W-2 from them. You relocate temporarily to California. Will you need to file a California return and pay California income tax?

Answer: You need to file a California personal income tax return if you performed services in California for wages. Where you performed services determines how you file your taxes (not the location of your employer). Review Scenario 1 for more information.

Scenario 3: You’re an independent contractor who relocates temporarily to California. You have not had previous source income from California. Will you need to file a California return?

Answer: Maybe. If you are a nonresident independent contractor whose income was not previously considered California source, you would not create California source income simply by relocating temporarily to California. If a customer in California receives the benefit of your services in California, you will need to file a return.

California source income for independent contractors is determined by looking to where the benefit of the service is received. The location where the independent contractor performs the work is not a factor.

Audit Programs

Have you delayed any audit activities?

Our audit, claims and protest programs for the most part continue with some modifications:

  • We are using various alternate communication methods to interact with taxpayers and representatives vs. in-person meetings
  • We are accepting electronically signed waivers to extend the statute of limitations through December 31, 2021
  • We are granting extensions of time to respond to document requests
  • As of July 2020, we commenced new correspondence and field audits using virtual platforms

Statute of limitations waivers

Will FTB still require taxpayers and/or tax representatives to provide statute of limitations waivers containing original signatures?

We will temporarily accept statute of limitations (SOL) waivers with e-Signatures.

Taxpayers and/or their representatives may submit signed SOL waivers to us by one of the following methods:

  • Fax the SOL waiver to us with a handwritten signature
  • Email a copy of the SOL waiver with a handwritten signature to us from a verified email address
  • Upload a scanned copy of the SOL waiver with a handwritten signature to the taxpayers’ MyFTB accounts
  • Upload a scanned copy of the SOL waiver with a handwritten signature to cloud storage and provide our staff the link to download the waiver
  • New: Utilize a third party service, such as DocuSign, for their Electronic Signature solution

The e-Signatures option is temporary through December 31, 2021.

Nonresident nonwage withholding

I submitted Form 588, Nonresident Withholding Waiver request and there’s been no response. What should I do?

Scenario: You submitted Form 588, Nonresident Withholding Waiver request to FTB. It’s been 21 business days and you have not received a response. Does this mean FTB denied the waiver request and you should withhold?

Answer: If you have not received a response from us within 21 business days, this does not mean we denied your request. We’re working to complete them as quickly as possible.

If you have not heard back from us within 45 business days, call the Withholding Services and Compliance Section at (888) 792-4900.

As a general rule, withholding is required unless we issue a determination notice authorizing a waiver.

I have not received a response to my Form 589, Nonresident Reduced Withholding Request. How do I know if it’s been approved?

Typically, we respond to Form 589 requests within 10 business days for those filed online and 21 business days for those filed by mail. We’re working to complete them as quickly as possible.

If you have not heard back from us after 45 business days, call the Withholding Services Compliance Section at (888) 792-4900.

As a general rule, withholding on the full amount is required unless we approve your request.

Real estate withholding

Will I be penalized if I can’t submit forms or payments due to office closures, etc.?

We will review these on a case-by-case basis and determine whether reasonable cause has been shown.

If you’ve been penalized during this time and believe you qualify for penalty relief, please respond as indicated at the bottom of your notice or fax your request and substantiating documents to 916-845-9512.

Can I make electronic payments for real estate withholding?

Right now, you cannot make electronic payments for real estate withholding.

If you have a CA corporation ID number, you may file by EFT through your bank using payment type code 01190. Visit Electronic funds transfers for corporations or call us at 916-845-4025 for more information.

Individual status letter

An Individual Status Letter (FTB 4148), does the following:

  • Helps you get student loans or Veterans Affairs (VA) financing
  • Shows lenders and third parties, such as employers, that you have no outstanding California income tax obligations

You can receive a letter for:

  • Yourself
  • A minor child under age 18 (birth certificate required)
  • An individual over age 18 (a signed statement authorizing Franchise Tax Board (FTB) to release information on their behalf is required)

How to receive a letter

Due to the current COVID 19 State of Emergency, email the following to FTBIndividualStatusLetter@ftb.ca.gov:

  • Student’s name and address
  • Requester’s telephone number and email address