Paying Electronically Saves Time
We all know that going paperless saves time, hassle, and trees. Paying electronically means your client doesn’t have to spend time writing and mailing a check. It also ensures that their payment is quickly applied to their account. We encourage them to use one of the many options we offer for electronic payments. But which is right for them? We provided you a brief summary of the options below.
We also created an e-pay toolkit that contains posters, pamphlets, and a Payment Reminder letter that you can provide your client with their balance due and step-by-step instructions on using Web Pay. Using the toolkit is another way to show your clients your commitment to making their lives easier. Go to ftb.ca.gov and search for e-pay toolkit.
Electronic Funds Withdrawal (EFW):
Use this option to pay electronically when e-filing. Your client can pay when they e-file their balance due return, and not worry about having to remember to mail a check later. They can choose the amount they want to pay, as well as the date they want the funds to be transferred from either their checking or savings account. Your clients can even schedule electronic withdrawal for their next year’s estimated tax payments when they e-file. Check your software provider’s instructions for the availability of this option.
Your clients can request a debit to their account online, at any time, to pay any FTB liability, including:
- A balance due on their current-year tax return
- Extension payments (Form FTB 3519)
- Estimated tax payments (Form 540-ES)
- Prior-year amounts
- Billing Notice
- Notice of Proposed Assessment
- Tax Deposit
Similar to EFW, your clients choose the amount to pay and the date the funds should be transferred from their checking or savings accounts. They can schedule their estimated payments up to a year in advance or subscribe to our estimated tax payment email reminder service and never miss a due date.
To use Web Pay, all that your clients will need to enter are their social security number and last name.
Your clients can use their credit cards to pay any bill when they make a payment through Official Payments Corporation. Official Payments Corporation charges a convenience fee of 2.5 percent (minimum $1).
If your clients are unable to pay their balances in full, encourage them to apply for an installment agreement online. Generally, your clients qualify if they:
- Owe a balance of $25,000 or less.
- Agree to pay their balance in 60 months or less.
- Have filed all personal income tax returns.
Approval will be based on ability to pay and compliance history. There is a $20 fee for establishing installment agreements. We will add the fee amount to your client’s balance.
As a reminder, the law requires individuals to remit all future payments electronically once they:
- Make an estimated tax or extension payment (by check or electronic method) over $20,000 for a taxable year beginning on or after January 1, 2009; OR
- File an original return with a tax liability over $80,000 for a taxable year beginning on or after January 1, 2009.
Once your client meets the mandatory e-pay threshold, they are required to make all subsequent payments electronically, regardless of the amount, type, or taxable year. Fiduciaries, estates, and trusts are not required to make payments electronically, regardless of the amount owed. Since passage of the Mandatory e-Pay law for Individuals, compliance by taxpayers and their representatives has steadily increased. Therefore, in 2010, we will again not assess the Mandatory e-Pay penalty.