California ~ Personal Income Tax: Underpayment of Estimated Tax Penalty Erroneously Assessed

The California Franchise Tax Board (FTB) has issued a public service bulletin announcing that, due to a processing error, some notices were sent erroneously assessing the underpayment of estimated tax penalty for tax year 2009 to high-income personal income taxpayers who met the exception to the penalty.

For tax year 2009, taxpayers with adjusted gross income of $1 million or more were required to pay 90% of their current year tax in withholding and/or estimated tax payments. Taxpayers are subject to the underpayment of estimated tax penalty if this requirement was not met. An exception applies if the amount of the tax liability (not including any tax on lump-sum distributions) less credits (including withholding), but not including estimated tax payments for either 2008 or 2009, was less than $500 (or less than $250 for married/registered domestic partner taxpayers filing separately).

The processing error has been corrected for tax returns processed after June 29, 2010. The FTB has identified the affected 2009 tax returns and corrected accounts. FTB 719PC, Underpayment of Estimated Tax Penalty, will be sent to taxpayers regarding the adjustment beginning July 26, 2010. If applicable, refunds will be mailed within two weeks of account correction.

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Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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