Recently, some tax professionals posted on our Message Board that they had gotten notices from the FTB indicating that 2020 overpayments were not credited to 2021 as had been requested on the returns. This was also an issue following the 2020 filing season, and while we didn’t expect it would happen again in 2021, we also did not anticipate the 2021 filing deadline being extended to May 15 (May 17 because May 15 was a Saturday).
Some taxpayers had made the extension and the estimated payments with one timely mailed check. The taxpayers then received a notice from the FTB indicating that the overpayment was not applied.
According to the FTB, “This situation happens every year for current year payments that are made after the normal 4/15 filing due date. While the 2020 filing due date was postponed to 5/15, our system did not read the 5/15 payments as timely. Therefore, the payment amounts must be manually applied to the current tax year and the excess is transferred to the next year per the taxpayer’s request. Notices may be generated and sent out before the account is manually corrected, but we will not send revised notices once the account is manually corrected.”
If your client received one of these notices, you don’t need to do anything because the accounts should be corrected soon. You can verify that the adjustment has been made via your client’s account on MyFTB.