FTB sends third quarter estimated tax notices - Spidell

FTB sends third quarter estimated tax notices

The FTB is sending notices reminding taxpayers to make their third quarter estimated tax payment on September 15. But there is no required third quarter estimated payment for state purposes. California law requires estimates to be paid in these amounts:

  • 1st quarter: 30%
  • 2nd quarter: 40%
  • 3rd quarter: 0%
  • 4th quarter: 30%

The FTB tells us that they still get a significant number of people making their installments over four quarters, which is why they send the email out. And, in fact, Form 540-ES includes a 3rd quarter estimate due September 15.

While we understand some people are in the habit of making four estimated payments, we have suggested changing the language in the notice to clarify that there are only three required payments.

We also suggested that on the September 15 portion of the 540-ES, the FTB make a notation at the top stating that the payment is not required unless the individual underpaid a previous estimated tax payment.