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California Mandatory E-Pay Tax Payments


In 2008, the California legislature enacted legislation which added Section 19011.5 to the California Revenue and Taxation Code. This requires California individual taxpayers to remit all future payments electronically once any of the following conditions have been met:

  1. The individual taxpayer makes an estimate tax or extension payment that exceeds twenty thousand dollars ($20,000) for any taxable year beginning on or after January 1, 2009; OR
  2. The individual taxpayer's total tax liability, as shown on the original return, exceeds eighty thousand dollars ($80,000) for any taxable year beginning on or after January 1, 2009.

Once the taxpayer has met the mandatory e-pay threshold, the California Franchise Tax Board (FTB) will send the taxpayer an FTB 4106 MEO, Mandatory e-pay Participation Notice, advising the taxpayer that all subsequent payments must be remitted electronically, regardless of the amount, type, or taxable year.

On January 1, 2011, the FTB started assessing a penalty on taxpayers who failed to make payments electronically and paid using any other method. The mandatory e-pay penalty is equal to one percent (1%) of the amount paid incorrectly. The FTB may waive the penalty if the taxpayer can show that the failure to pay electronically was for reasonable cause and not willful neglect.

Taxpayers who are required to make payments electronically may remit their payments using one of the following methods:

  1. Pay online with Web Pay at;
  2. Request an Electronic Funds Withdrawal (EFW) when e-filing a tax return;
  3. Pay by credit card online at or by calling toll free 1-800-272-9829;
  4. Use an available pay-by-phone option by completing and submitting form FTB 4073, Mandatory e-pay Pay-by-Phone Authorization Agreement for Individuals, available at

A taxpayer who is required to make payments electronically may request a waiver of this requirement if any of the following conditions have been met:

  1. The particular amounts paid in excess of the threshold amounts did not represent the taxpayer's total tax liability; OR
  2. The taxpayer has not made an estimated tax or extension payment in excess of $20,000 during the current or previous tax year; OR
  3. The taxpayer's total tax liability for the current or previous taxable year did not exceed $80,000.

The taxpayer must complete and submit form FTB 4107, Mandatory e-pay Election to Discontinue or Waiver Request, available at, to request a waiver of this requirement. The taxpayer must continue to make payments electronically until the FTB grants the waiver request. If the FTB grants a waiver but the taxpayer subsequently meets the mandatory e-pay requirements, the taxpayer must resume making tax payments electronically.




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