Be sure you qualify before you use FTB's CalFile - Spidell

Be sure you qualify before you use FTB’s CalFile


In Appeal of Powe, a taxpayer was liable for the 2.5% early distribution additional tax for a retirement account withdrawal she took before she was age 59½. The taxpayer used the FTB’s CalFile software to prepare her California return, and she argued that by assessing the additional tax, she was being penalized for using CalFile. The FTB countered that taxpayers who owe tax on an early distribution or other retirement plan cannot use CalFile, and the taxpayer didn’t enter her 1099-R information correctly. Because the taxpayer technically shouldn’t have used CalFile and didn’t follow the instructions, she was liable for the additional tax. (2019-OTA-363)