- Account (FIRM purposes only)
- Demand deposit account.
- Share or share draft account.
- Checking or negotiable withdrawal order account.
- Savings account.
- Time deposit account.
- Money market mutual fund account regardless of whether the account bears interest.
- ACH credit
- The Automated Clearing House (ACH) credit method allows you to transfer funds by instructing your financial institution to debit your account and credit the state's bank account.
- ACH debit
- The Automated Clearing House (ACH) debit method allows you to transfer funds by instructing the state to electronically debit a bank account you control for the amount you report to the state's data collector. FTB recommends the ACH debit method because of the simplicity and cost savings to the taxpayer.
- Adjusted gross income (AGI)
- Your federal adjusted gross income from all sources reduced or increased by all California income adjustments.
- Adopted Child
- An adopted child is a child you have legally adopted. After legal adoption, the child is considered your child by blood. Before legal adoption, a child is considered your child for head of household purposes if, during the tax year, he or she was placed with you for adoption by an authorized agency and was a member of your household.
- Annual Report
- Summary of our major program activities during the calendar year and statistical profile of California individual and business taxpayers.
- If you were married in the tax year but the marriage was later annulled, you are treated as having been unmarried during the year.
- Bank Garnishment | Bank Levy
- See Order to Withhold
- Board of Equalization (BOE)
- California State agency that administers sales and use, property, and special taxes.
- One who is lawfully entitled to the benefits of property, the title to which is vested in another, such as an executor or trustee.
- Our free, direct e-file for California resident personal income tax returns.
- California Public Records Act
- Find out how to get public information under the California Public Records Act.
- California Source Deferred Gain
- For purposes of the like-kind property exchange reporting requirement, it is the portion of your total California source gain that you defer pursuant to Internal Revenue Code Section 1031.
- A casualty occurs when property is damaged as a result of a disaster such as a hurricane, fire, car accident or similar event. Generally, you may deduct a casualty loss only in the tax year in which the loss occurred. However, if you have a casualty loss from a disaster that occurred in an area declared by the President or the Governor as a disaster area, the loss may be claimed for the year in which the disaster occurred, or the year immediately before the loss.
- Composite statement
- Composite statement means one in which two or more required Internal Revenue Service statements (for example: Forms 1099-B and 1099-DIV) are furnished to the recipient on one document.
- Disposable Earnings
- An employee's total earnings minus lawful deductions.
Lawful deductions include:
- Federal income tax
- Social security
- State income tax
- State disability
- Domestic Partnership
- California Family Code section 297 provides that "domestic partners are two adults who have chosen to share one anothers' lives in an intimate and committed relationship of mutual caring." Read more.
- Earned income
- Includes wages, salaries, tips, professional fees, net self-employment income, and other compensation received for personal services.
- Earnings Withholding Order
- An Earnings Withholding Order is a continuing levy on a percentage of an individual's earnings. We issue an Earnings Withholding Order for individuals who owe an unresolved delinquent vehicle registration amount or court-ordered debt.
- Earnings Withholding Orders for Taxes (for employers)
- An Earnings Withholding Order for Taxes is a continuing levy on a percentage of a taxpayer's earnings. We issue an Earnings Withholding Order for Taxes for taxpayers who owe an unresolved delinquent tax debt.
- Economic Development Areas (EDAs)
- California currently has four types of Economic Development Areas (EDAs) that have related tax incentives. These areas are: Enterprise Zones (EZs), Local Agency Military Base Recovery Areas (LAMBRAs), Manufacturing Enhancement Areas (MEAs), and Targeted Tax Areas (TTAs). Taxpayers who conduct business activities within the boundaries of one of these areas or zones may qualify for special state tax incentives.
- Allows you to file your return electronically using software.
- Electronic Funds Transfer (EFT)
- A method of payment. It is convenient, helps prevent installment agreement defaults, and saves processing costs.
- Employment Development Department (EDD)
- A California state agency that manages California payroll taxes.
- Entertainment Industry Independent Contractors
Can be individuals, corporations, limited liability companies (LLCs), or partnerships. They include, but are not limited to:
- Dance teams
- Sports entertainers
- Stage help
- Lighting crews
- Talent agents
Entertainment industry withholding agents must withhold at the 7 percent rate when appropriate.
- The decedent’s total assets and liabilities at the time of death.
- Any individual or organization responsible for the custody and/or administration of any person’s estate or trust property. For example: Guardian, trustee, executor, administrator, receiver, or conservator.
- Financial Hardship
- If you cannot pay the full amount due with your income tax return, you can ask to make monthly installment payments. However, you will be charged interest and may be charged a late payment penalty on the tax not paid by the due date, even if your request to pay in installments is granted. If your request is granted, you must also pay a fee. To limit interest and penalty charges, pay as much of the tax as possible with your return. But before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan.
- Financial institution (FIRM purposes only)
- A depository institution, as defined in Section 1813(c) of Title 12 of the United States Code.
- An institution-affiliated party, as defined in Section 1813(u) of Title 12 of the United States Code.
- A federal credit union or state credit union, as defined in Section 1752 of Title 12 of the United States Code, including an institution-affiliated party of a credit union, as defined in Section 1786(r) of Title 12 of the United States Code.
- A benefit association, insurance company, safe deposit company, money-market fund, or similar entity authorized to do business in this state (R&TC Section 19266(h)(2)).
- Franchise Tax Board (FTB)
- An administrative agency of the State of California that is responsible for collecting California personal and business income taxes.
- Gross Earnings
- Wages, salary, commissions, bonuses, vacation pay, or anything an employer pays an employee for personal services.
- Gross income
- All income you received in the form of money, goods, property, and services from all sources that are not exempt from tax. Gross income does not include any adjustments or deductions.
- Head of Household
- Although you are the head of your house, you may not qualify for the head of household filing status under state and federal tax laws. The legal requirements are more complicated than simply being the head of the house.
- Higher Order
- A levy sent to an employer from a state agency other than the Franchise Tax Board or from the federal government. For the priority order for withholding, see /individuals/ewot.shtml.
- Innocent Spouse
- Generally, when a joint tax return is filed, each spouse is equally liable for all the tax, penalties, and interest for the particular joint tax year. This means the entire amount of tax, penalties, and interest may be collected from either spouse, even if only one spouse earned all of the income. However, a spouse who meets certain legal requirements may qualify as an innocent spouse and be fully or partially relieved of the liability to pay joint tax, penalties, and interest. Read more.
- Installment agreement
- If you cannot pay your taxes in full, you may request to make monthly installment payments. If we approve your request, we agree to let you pay the tax you owe in monthly installments instead of immediately paying the amount in full. Once we accept your online installment agreement application, you should receive a written notice within 30 days. You can only make one request per year.
- Independent contractor
- An independent contractor is an individual or entity that contracts to perform services. Employees are not independent contractors.
- Internal Revenue Service (IRS)
- An administrative agency of the U.S. Department of the Treasury that is responsible for collecting federal personal and business income taxes and federal payroll taxes.
- Levy - Bank garnishment or bank levy
- See Order to Withhold
- Levy - Wage garnishment
- A legal court order that compels a third party to withhold part of an individual's wages to satisfy a debt. (A levy is also referred to as a wage garnishment or a wage assessment.)
- A lien is a legal claim against real or personal property to satisfy a debt.
- Mandatory e-file
- California law requires tax practitioners who prepare more than 100 California individual income tax returns annually and prepare one or more using tax preparation software to e-file all personal income tax returns.
- Manufacturers' Investment Credit (MIC)
- The Manufacturers' Investment Credit was repealed as of January 1, 2004. Use Form 3540 to claim any remaining carryovers for this credit.
- A U.S. national is an individual who, although not a U.S. citizen, owes allegiance to the U.S. This includes American Samoans and Northern Mariana Islanders who chose to become U.S. nationals instead of U.S. citizens. For more information, refer to federal Publication 519, U.S. Tax Guide for Aliens at irs.gov, or contact your local Office of the Immigration and Naturalization Service.
- Nonrecourse Debt
- If you owned property that was subject to a nonrecourse debt in excess of the fair market value of the property, the lender's foreclosure on the property does not result in ordinary income from the cancellation of debt. The entire amount of the nonrecourse debt is treated as an amount realized on the disposition of the property. You may have a taxable gain or loss on the forgiveness to the extent the outstanding debt exceeds your basis in the property.
- Nonrefundable Renter's Credit
- The Nonrefundable Renter's Credit is a personal income tax credit that can only be used to offset your tax liability; therefore, you must have a tax liability to claim the credit.
- A nonresident is any individual who is not a California resident. Get more information for nonresidents.
- Nonresident Alien
- If you were a nonresident alien during any part of the year, you cannot qualify for head of household filing status even though you may meet all of the other rules for the filing status.
- Nonwage compensation examples
- Real estate transactions
- Interest and dividends
- Rents and royalties
- Prizes and winnings
- Premiums and annuities
- Compensation for personal services
- Other fixed or determinable annual or periodic gains, profits, and income
- Notice Codes
- You can view an explanation of the adjustments made to your California Personal Income Tax Return by clicking on the CODE that matches the CODE on your notice.
- Offer in Compromise (OIC)
- The program is for taxpayers who do not have, and will not have in the foreseeable future, the income, assets or means to pay their tax liability. It allows a taxpayer to offer a lesser amount for payment of a non-disputed final tax liability.
- Order to Withhold
- Also known as a bank garnishment or bank levy, is a legal order we issue to collect delinquent tax and nontax debts. | Delinquent Tax: OTW for Individuals and OTW for Business Entities | Nontax: OTW for Court-Ordered Debt and OTW for Vehicle Registration Debts
- Part-year resident
- A part-year resident is any individual who is a California resident for part of the year and a nonresident for part of the year. Get more information for part-year residents.
- For purposes of our withholding tax forms, we use the term “payee” to describe any person or entity that receives payment from a payer (see more at "Withholding agent" below). We may also refer to the payee as the “vendor.” Payees may be residents or nonresidents of California.
- A payer is an individual, a business, or a government entity that makes payments to a payee. Payers are also known as withholding agents.
- Power of Attorney
- A legal document that allows someone else to act on your behalf, in matters that you specify in the Power of Attorney document. You can also use this document to authorize an individual to receive information administered by us for non-tax issues such as Child Support Collection.
- Public Records Act
- Find out how to get public information under the California Public Records Act.
- ReadyReturn is a free service we developed to make filing individual tax returns easier. We use information the state already has from the last return you filed and your Form W-2 to pre-fill a California state tax return. If you qualify, your return may be ready and waiting for you. All you need to do is review your return, make any necessary changes, and file your return.
- Real Estate Escrow Person
- The person (including any attorney, escrow company, or title company) responsible for closing the transaction, or any other person who receives and disburses the consideration or value for the interest or property conveyed.
- Recourse Debt
- Debt for which you are personally liable is recourse debt. All other debt is nonrecourse debt. If the lender forgives all or part of the amount of the debt in excess of the fair market value (FMV) of the property, the cancellation of the excess debt may result in ordinary income. The ordinary income from the cancellation of debt (the excess of the canceled debt over the market value of the property) must be included in your gross income reported on your tax return unless one of the exceptions or exclusions applies. You may also have a taxable gain or loss on the forgiveness to the extent that the fair market value of the property exceeds your basis in the property.
- A legal order that terminates a wage garnishment, releasing an employer from complying with a current Earnings Withholding Order.
A California resident is any individual who meets any of the following:
- Present in California for other than a temporary or transitory purpose.
- Domiciled in California, but located outside California for a temporary or transitory purpose.
- Domicile is defined for tax purposes as the place where you voluntarily establish yourself and family, not merely for a special or limited purpose, but with a present intention of making it your true, fixed, permanent home and principal establishment. It is the place where, whenever you are absent, you intend to return.
- For a complete definition, refer to "Meaning of Domicile" in FTB Publication 1031 Guidelines for Determining Resident Status.
- Request Public Information
- Find out how to get public information under the California Public Records Act.
- Same-Sex Married Couples
- On May 15, 2008, the California Supreme court invalidated two sections of the Family Code that prevented same-sex couples from getting married (In re Marriage Cases, (2008) 43 Cal. 4th 757,). Under this ruling, same-sex couples are allowed to marry. Read more
- Separate property
- All property owned separately by the husband or wife before marriage. It is also property acquired separately after marriage by the husband or wife as a gift, devise, bequest or inheritance. Separate property may be acquired during marriage by purchase with separate funds, by exchanging the separate property, or in accordance with a pre- or post-nuptial agreement.
- State Disability Insurance (SDI)
- Provides temporary payments to workers who are unable to perform their usual work because of a pregnancy or a nonoccupational illness or injury. Beginning January 1, 2004, SDI also includes Paid Family Leave, which provides benefits to workers who need to care for a seriously ill family member or to bond with a new child. SDI benefits are taxable only if paid as a substitute for unemployment insurance (UI) benefits. This could occur if a person was receiving UI benefits and then became disabled. When SDI benefits are received as a substitute for UI benefits, the SDI is taxable by the federal government but is not taxable by the State of California.
- A stepchild is not your natural child but is the natural or adopted child of your spouse. To have a stepchild, you must have at some time been married to the child's parent.
- Tax Gap
- Experts define the tax gap as the difference between what taxpayers owe and what they voluntarily pay.
- Temporary Absence
- Even if you, your spouse, or your qualifying person was temporarily absent from your home, you are considered to have occupied the same household. Temporary absences include those due to illness, education, business, vacations, military service, and, in some cases, incarceration. If you or the qualifying person were absent, it must have been reasonable to assume that you, your spouse, or your qualifying person would return to the household after the temporary absence, and you must have continued to maintain a household in anticipation of the return. Time your qualifying person was in the custody of another person under either a formal or informal custody agreement cannot be considered a temporary absence.
- A legal entity created by a grantor under the laws of the state by a valid trust instrument for the benefit of designated beneficiaries.
- An individual or organization that holds or manages and invests assets for the benefit of another.
- Use Tax
- You may owe this tax on purchases you made from out-of-state or Internet sellers. Use tax is similar to the sales tax paid on purchases you make in California. You may report use tax on your income tax return instead of filing a use tax return with the State Board of Equalization (BOE). To report use tax on your income tax return, use the Use Tax Worksheet in the tax booklet. Read more on the BOE website.
- The VITA and TCE volunteer programs provide free assistance to individuals with limited income and/or over the age of 60 who need help in completing simple federal and state income tax returns.
- Voluntary Disclosure Program
- Allows qualified entities, qualified shareholders, or beneficiaries that may have incurred an unpaid California tax liability or an unfulfilled filing requirement to disclose their liability voluntarily.
- Voluntary Plan Disability Insurance (VPDI)
- A private disability insurance plan which meets the requirements of, and is approved by the State of California.
- Web Pay
- Used to make your personal income tax payments online. You can pay today or schedule your payment up to one year in advance.
- Withholding Agent
- A withholding agent is any person or entity having the control, receipt, custody, disposal, or payment of California source income. We also refer to withholding agents as “payers.” For more information, see Withholding on Wages, Other Income, and Garnishments.