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To inform staff of the law change requiring certain PIT taxpayers to remit their payments electronically.


AB 1389 (enacted September 30, 2008) added R&TC §19011.5, requiring some taxpayers to make their payments electronically.


The law takes effect January 1, 2009 for tax years beginning on or after January 1, 2009. Taxpayers whose total tax liability is greater than $80,000, or who make an estimated or extension payment of $20,000 or more must send their payments electronically.

Once the mandatory e-pay threshold is met, all subsequent payments regardless of type, amount, or tax year, must be sent electronically. Electronic payment methods include Electronic Funds Withdrawal (EFW), web pay, or credit card.

A 1% penalty of the amount paid will be assessed unless the failure to pay electronically was for reasonable cause and not willful neglect.

Note: If a taxpayer sends a 2008 estimate payment January 15, 2009 for more than $20,000, this payment will not change their status to mandatory.


On December 1, we sent a courtesy letter to taxpayers who made a payment in 2008 that would qualify them for mandatory e-pay. The letter informed taxpayers of the law change, and that they may meet the mandatory e-pay threshold in 2009.

Taxpayers making a payment or filing a tax return that meets the mandatory e-pay threshold will be mailed FTB 4106 MEO, Mandatory e-pay Participation Notice (available March 2009), informing them of the law and the requirement to make all payments electronically.


Taxpayers can request to discontinue making electronic payments, when they no longer meet the threshold requirements in the previous tax year. Taxpayers must complete and submit via mail form FTB 4107, Mandatory e-pay Program Waiver Request (available on our website March 2009). All waiver requests will be reviewed and taxpayers will be notified in writing if the waiver is approved or denied.

Franchise Tax Board
PO Box 942840
Sacramento, CA 94240-0040

Taxpayers, who are granted a waiver and then later meet mandatory e-pay requirements, will again be required to send all payments electronically. They will be mailed another FTB 4106 MEO, Mandatory e-pay Participation Notice.


Taxpayers can visit our website and search for “mandatory e-pay.”


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