California Tax Service Center

Estimated and Prepayment Taxes


Estimated Taxes for California (Franchise Tax Board)

Estimated tax is the income tax you expect to owe for the current tax year after subtracting the tax you expect to have withheld and any credits you plan to take. Use the Estimated Tax Worksheet (Form 540-ES) to determine if you owe estimated tax and to figure the required installment amount. Generally, the required installment amount is based on 90% of the current year's tax.

For taxable years beginning on or after January 2001, individuals with adjusted gross income greater than $150,000 (single, married filing joint, head of household, or qualifying widow[er]) or $75,000 (married filing separate) must base their estimated tax on the lesser of 80% of their current year's tax or 105% of the prior year's tax. For taxable years beginning on or after January 2002, individuals with adjusted gross income greater than $150,000 (single, married filing joint, head of household, or qualifying widow[er]) or $75,000 (married filing separate) must base their estimated tax on the lesser of 90% of their current year's tax or 110% of the prior year's tax.

Certain taxpayers are required to make quarterly payments on their estimated tax liability.

Individuals using a calendar year (due dates 4/15, 6/15, 9/15, and 1/15):

Estimated payments required unless:
80% of prior year tax is paid by withholding
90% of current year income is from sources that had withholding
Prior year tax was less than $200
Current year tax will be less than $200
Use Form 540-ES.

Partnerships/Limited Partnerships, Limited Liability Companies, and Limited Liability Partnerships (not classified as corporations):

No estimated tax.

Corporations/S Corporations (including LLCs classified as corporations)(Actual due dates for calendar filers are 4/15, 6/15, 9/15, and 12/15. For fiscal filers, see instructions to Form 100-ES):

The minimum tax is due the first quarterly due date after the corporation is formed.
Use Form 100-ES.

Prepayment of Minimum Franchise Tax for Corporations, S Corporations and LLCs classified as corporations

For income years beginning on or after January 1, 2000, the prepayment of the minimum franchise tax for new corporations is $0 and the minimum franchise tax on your first return is also $0. Your tax for the first return is computed by multiplying the appropriate tax rate by your net income. Your estimated tax requirement is 100% of your current year tax made in equal installments. For more information, see the instructions to Form 100-ES.

Estimated Taxes for Federal (Internal Revenue Service)

Click on the following for information on:
Individual Estimated Taxes (Publication 505)
Corporations Estimated Taxes (Publication 542)

Prepayment Taxes (State Board of Equalization)

Sales and Use Tax Quarterly Prepayments

When you obtain your seller's permit, you will be instructed to file your sales and use tax return on a monthly, quarterly, annual, or quarterly prepayment basis (the determination is based on the volume of sales expected for your business).

Businesses with average taxable sales of $17,000 or more per month are required to make tax prepayments to the BOE. You will be notified in writing if this requirement applies to you. Please do not make prepayments without written authorization. You will be required to make two prepayments each calendar quarter. You must also file a quarterly return with your payment of the remaining tax due by the last day of the month following the end of each quarter. The BOE will send you a tax return form (prepayment form - BOE-1150 series) to complete at the close of each reporting period. The filing due date is printed at the top of the return. If you do not receive your tax return form within 15 days after the end of the reporting period for your business, you should call the Information Center at (800) 400-7115.

Some prepayment accounts must pay by Electronic Funds Transfer (EFT). EFT payments are currently required for businesses that pay an average of $20,000 per month in sales and use taxes. Other businesses can make EFT payments on a voluntary basis. For more information, call (800) 400-7115 and ask for Publication 80, Electronic Funds Transfer Program: Information Guide . You can also obtain information on EFT payments by downloading Publication 80 from BOE's Internet site.