SACRAMENTO — The Franchise Tax Board Jan. 8 announced it is now accepting 2012 state tax returns, and announced the following updates on law changes and filing services for California taxpayers.
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American Taxpayer Relief Act of 2012
Due to changes contained in this federal legislation, the California Schedule CA (540 & 540NR), 540/540A and 540NR Booklets, and other products that reference federal Schedule A, are delayed as FTB staff analyzes the changes. The California Schedule CA is used by most taxpayers to make adjustments for differences between federal and state tax laws. Taxpayers who file using FTB’s CalFile, ReadyReturn, or Form 540 2EZ are not affected. Check FTB’s Website for updates about when these schedules will be released.
The standard deduction for single or filing separately tax statuses increased from $3,769 to $3,841. For joint, surviving spouse, or head of household filers, it increased from $7,538 to $7,682.
Exemption credit increases
The dependent exemption credit increased from $315 to $321 per dependent. The personal exemption amount for single, filing separately, and head of household filers increased from $102 to $104. For joint or surviving spouses, it increased from $204 to $208.
Tax rates increase for some
Income tax rates increased by up to 3 percent for individuals making $250,000 or more.
The income tax changes apply retroactively to all income earned or received since Jan. 1, 2012. The law waives the underpayment of estimated tax penalty that results from a retroactive tax law change that takes place during the year.
Free do-it-yourself services
FTB encourages taxpayers and practitioners to explore its many self-service applications available through FTB’s Website:
New CalFile features make filing easier
CalFile is one of the state’s no-cost, easy-to-use e-file options that is available to more than 6.4 million taxpayers. CalFile accepts taxpayers with income of up to $339,464, itemized deductions, and some tax credits.
This year’s version of CalFile offers new features to make it easier and more convenient for taxpayers to complete their return. Taxpayers have the new option to receive an email confirmation verifying the return was filed and the ability to save information and come back later to finish the return. Go to FTB’s website and ftb.ca.gov to access CalFile.
Free online filing in minutes. FTB’s other free e-file program, ReadyReturn uses information the state already has to generate a completed state tax return online for selected taxpayers. Eligible taxpayers must have used the single or head of household filing status the prior year, had one employer, claimed no more than five dependents, and took the standard deduction.
This service can be used to change a mailing address or get information about wages, California withholding, estimated tax payments, balances due, or FTB-issued 1099 forms. Taxpayers and tax professionals complete a one-time registration process.
Try live chat
FTB’s Live Chat connects FTB representatives with taxpayers who have personal or business income tax questions or have questions about with FTB’s website and its online services.
Check your refund status
After filing the 2012 tax return, taxpayers can use this service to see where their refund is. Generally, e-filed returns with refunds and requests for direct deposit are issued within seven days and mailed refund checks are sent within two weeks. Paper-filed returns take longer, up to six to eight weeks depending on the time of year the return is filed. This service is available in English, Spanish, and mobile devices.
Pay taxes online
FTB’s Web Pay allows individuals and businesses to authorize a payment from their bank account to pay their return balance due or extension payment. Payment must be made on or before April 15, to avoid penalties and interest. Taxpayers can also make estimated tax or any bill payments online, and sign up for email reminders of upcoming estimate payment due dates, cancel pending payments online, and save their bank account information for future payments. Taxpayers can schedule payments up to one year in advance. For a fee, taxpayers can pay their taxes with their American Express, Discover/NOVUS, MasterCard, and Visa cards.
Request a monthly payment plan
FTB offers monthly installment payment plans to taxpayers experiencing a financial hardship. Taxpayers who owe $25,000 or less and can repay their balance owed within five years generally qualify. Interested taxpayers should go to ftb.ca.gov and select installment agreement. Taxpayers can also apply by phone using our Interactive Voice Response (IVR) system at 800.689.4776.
Get answers to FAQ
Answers to questions about various tax topics such as return filing requirements, tax credits, and the Head of Household filing status can be found online at ftb.ca.gov.
FTB provides automated toll-free phone service at 800.338.0505. To speak with a customer service representative, FTB staffs its general toll-free phone line, 800.852.5711, from 7 a.m. to 5 p.m., weekdays excluding state holidays.
FTB has six regional field offices that provide walk-in service from 8 a.m. to 5 p.m., weekdays in Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and Santa Ana. For directions, go to ftb.ca.gov and click on the Contact Us tab.
Services available in Spanish
FTB offers many services in Spanish including forms, publications, refund status, and answers to frequently asked questions.
Use tax may be reported on income tax returns instead of filing use tax returns with the State Board of Equalization. To report use tax on an income tax return, taxpayers may use either the Use Tax Worksheet or the Use Tax Table. Taxpayers can use a “look-up” table to report use tax on their state return. The estimated amount of use tax due is based on the individual’s adjusted gross income. A use tax liability typically occurs when a California consumer or business purchases tangible items for their own use from an out-of-state retailer that does not collect the California use tax. Taxpayers can go to boe.ca.gov for more details.
New electronic bank deposit system
FTB is using new software and scanners to make bank deposits electronically multiple times throughout the day.
Using the new scanners, FTB will scan all paper checks received and submit the image electronically to banks for deposit. Streamlining deposit preparation reduces the time, cost, and risk involved with processing paper checks.
Taxpayers can also make payments online using a bank account or major credit cards.
Tax-Exempt Organization e-Postcard Filing Threshold Now $50,000 – Tax-exempt organizations that normally have annual gross receipts of $50,000 or less must electronically submit information annually using the FTB 199N, Exempt Organization Annual Information Return.
New jobs tax credit
This incentive provides a credit of up to $3,000 for each added qualified full-time employee hired by a qualified small business employer. Funding is limited to $400 million. As of January 1, $262 million remains available. The credit must be claimed on a timely-filed original (not amended) 2012 return received before the $400 million limit is exhausted.
In general, employers qualify for the credit if they employed 20 or fewer employees in the prior year. They must have a net increase in qualified full-time employees in 2012 compared to the number of full-time employees employed in the prior year.
Net operating losses reinstated – For taxable years beginning on or after January 1, 2012, California has reinstated the Net Operating Loss (NOL) carryover deduction. A net operating loss occurs when certain tax-deductible expenses exceed taxable income for the year.
For taxable years 2010 and 2011, California suspended the NOL carryover deduction.
Voluntary contribution funds
Taxpayers can contribute to one or more charitable causes directly from the state tax form. New on the 2012 tax return are the: California YMCA Youth and Government Fund; California Youth Leadership Fund; School Supplies for Homeless Children Fund; State Parks Protection Fund/Parks Pass Purchase (Includes the option to contribute to the fund and/or purchase a pass).
Volunteer income tax assistance
Starting February 1, more than 1,000 centers statewide open through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. These sites offer free help with tax form preparation. Some offer services in Spanish, Chinese, Vietnamese, and Korean. For information on locations throughout California, go to ftb.ca.gov and click on the free filing assistance link.
Federal Earned Income Tax Credit (EITC)
This is a federal incentive for low-income individuals and families. Taxpayers earning less than $50,270 can qualify for a refundable credit that can total up to $5,891. “Refundable” means that taxpayers do not have to have a tax liability to get a refund check from the government. For those who might qualify, go to the IRS Website at irs.gov and search for EITC Assistant. California has no comparable state credit.