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Amended Tax Returns for Mortgage Debt Relief

Purpose of bulletin

To inform staff on how to address questions about the processing delay of amended tax returns for Mortgage Debt Relief.

Background

SB 401, the Conformity Act of 2010, allows taxpayers who had all or part of the loan balance on their principal residence forgiven by their lender, to exclude the forgiven debt from California gross income.

Original returns

E-file: If the original return was e-filed, the amended return will process within two weeks.

Paper: If the original return was paper filed, the amended return processing may take four to six weeks to process.

As a reminder, taxpayers need to write “Mortgage Debt Relief” in red across the top of their 2009 540X, Amended Individual Income Tax.

Taxpayer inquiries

Taxpayers can go to ftb.ca.gov, and search for mortgage forgiveness, or call us at 800.852.5711, Monday through Friday, 8 am to 5 pm.