Common penalties and fees

Overview

Typically, you receive penalties and fees when you do not meet requirements. For example, when you:

  • Don’t file on time
  • Don’t pay on time
  • Don’t pay enough estimated tax
  • Don’t have enough taxes withheld from your paycheck
  • Don’t pay electronically when you're required
  • Make a dishonored payment (bounced check, insufficient funds)

These are our most common penalties and fees. Visit our Penalty reference chart for more information.

We also refer to the Revenue and Taxation Code (RTC) section related to the penalty or fee.

Penalties when you file a tax return late or don’t file

Why you received this penalty

You did not pay by the due date of the tax return and did not file your tax return by the extended due date.

Penalty

5% of the amount due:

  • From the original due date of your tax return
  • After applying any payments and credits made, on or before the original due date of your tax return, for each month or part of a month unpaid

The maximum penalty is 25%.

Individuals only

If your tax return shows a balance due of $540 or less, the penalty is either:

  • $135
  • 100% of the amount due

Whichever amount is less.

For instance, if your balance is:

  • $134 or less: the penalty is equal to 100% of the amount due
  • Between $135 and $540: the penalty is $135

RTC 19131

Why you received this penalty

You did not file your return by the due date.

Partnership penalty

  • Before January 1, 2011: $10 for each partner/member, per month (up to 5 months).
  • On or after January 1, 2011: $18 for each partner/member, per month (up to 12 months).

S Corporation penalty

  • On or after January 1, 2011: $18 for each shareholder, per month (up to 12 months).

RTC 19172 and RTC 19172.5

Why you received this penalty

You did not file a return by the due date on the Demand for Tax Return letter. You may owe penalties and interest, even if your tax return shows that a refund is due.

Penalty

25% of the total tax amount due, regardless of any payments or credits made on time.

RTC 19133

Penalties when you pay late or don’t pay

Why you received this penalty

You did not pay entire amount due by your payment due date.

Penalty

  • 5% of the unpaid tax (underpayment), and
  • 0.5% of the unpaid tax for each month or part of the month it’s unpaid not to exceed 40 months (monthly).

For LLCs, the penalty is computed on the underpayment of annual tax, LLC fee, and non-consenting non-resident (NCNR) tax, if applicable.

RTC 19132

Why you received this penalty

For your estimated tax payment, you either:

  • Did not pay
  • Paid late
  • Underpaid

Penalty - individuals

We calculate the penalty on the unpaid amount from one of these (whichever is earlier):

  • The due date of the estimated tax installment to the date we receive your payment
  • The due date of the tax return

Visit Individuals due dates for the due dates.

The number of days late is first determined, then multiplied by the effective interest rate for the installment period. Visit interest rates for more information.

To avoid this in the future, increase your withholdings or make quarterly estimate payments.

RTC 19136

IRC 6654

Penalty - businesses

We calculate the penalty on the unpaid amount from the due date of the estimated tax installment to the following dates (whichever is earlier):

  • The date we receive your payment
  • The due date of your business return

Visit Businesses due dates for the due dates.

RTC 19164

Why you received this penalty

You sent us a payment and your financial institution declined (did not honor) that payment. Examples: Your check bounced, you did not have enough money in your bank account, or you stopped payment.

Penalty

If your payment was:

  • $1,250 or more: 2% of payment amount
  • Less than $1,250: $25 or the payment amount, whichever is less

RTC 19134

Why you received this penalty

You’re required to make payments electronically to FTB and you failed to do so.

Visit Mandatory e-pay for individuals or Electronic funds transfer for corporations for more information.

Penalty

  • Individuals: 1% of the amount not electronically paid
  • Businesses: 10% of the amount not electronically paid

RTC 19011.5 and RTC 19011

Why you received this penalty

You did not pay the lesser of:

  • The required LLC fee for the current year, or
  • 100% of the required LLC fee for the preceding year

By the estimated LLC fee due date.

Penalty

10% of the underpaid fee.

RTC 17942

Why you received this penalty

SOS notified us you did not file your entity’s annual or biennial Statement of Information on time. We collect this penalty on behalf of SOS. Only the SOS can waive the penalty.

To request a waiver: SOS email Penalty Waivers for Failing to File Statement of Information.

Penalty

  • Exempt organizations: $50
  • All other businesses: $250

Fees

Why you received this fee

We charge a collection cost recovery fee when we must take involuntary action to collect delinquent taxes.

Fee

Fees varies year to year based on legislation.
Who’s the fee for? Amount: 07/01/19 to current
  • Individuals
  • General and limited partnerships
  • LLCs treated as partnerships
  • LLPs

$317

  • Corporations
  • LLCs treated as corporations

$355

RTC 19254

Why you received this fee

We charge a lien fee for the costs of filing and releasing the lien with the applicable county recorder office or the California Secretary of State.

Fee

  • In-state: Varies county-to-county
  • Out-of-state: Varies

Visit Liens for more information.

RTC 19221

Why you received this fee

We charge a filing enforcement cost recovery fee for any individual or business who fails to file a required tax return in response to a legal demand to file.

Fee

Fees varies year to year. Current fees:

  • Corporations and LLCs treated as corporations: $85
  • Individuals and all other businesses: $93

RTC 19254

Why you received this fee

We impose a fee on individuals or businesses to cover costs to collect their delinquent taxes from the Federal Treasury Offset Program.

Fee

$22

GC 16583.1