Do I need to file an Extension for California State Tax?

In addition to federal taxes, we must pay certain taxes depending on the state where we live and the activity we do. However, there is something that both types of taxes have in common, and it is the deadlines to comply with the taxpaying obligations. However, if we are unable to comply in time we have an option to not pay penalties; for example, regarding California state tax there are new regulations for the year 2021 that includes the extension of the deadline.

If you have not yet filed and paid your California taxes, this article has key information that you undoubtedly need to know to complete this process.

What Is A Tax Extension?

It is known that when the time to file and pay taxes comes, in addition to the paperwork and calculations that we must do, the filing dates of our return is one of the most important things and to which we must pay close attention so as not to make mistakes.

Both the Internal Revenue Service (IRS) and the state tax departments indicate the dates by which we must comply with the tax obligation. If we do not comply on time, we will have to pay the penalties for non-compliance (not paying or presenting the returns on time).

However, just as there are set dates to do this, the IRS and state departments are aware that sometimes it is not possible for taxpayers to comply on time. For this reason, the “tax extension” was created, which is nothing more than an extension so people are able to file and pay their taxes.

For example, generally, the due date for California income taxes is April 15th of the following tax year. If a person does not pay before that date, they will be subject to penalties.

What is the California State Tax Extension for this year?

In March 2021, the IRS and the California Franchise Tax Board (FTB) extended the term to pay income taxes. Instead of the deadline being April 15th, taxpayers have opportunities to file and pay their taxes until May 17th, 2021.

Although the term has been extended and you have more time to prepare your tax return, if the date is approaching and you cannot comply with the tax obligation, you have the option of requesting the California state tax extension.

Generally, the tax extensions are 6 months, so if you request the extension and it is approved, you will automatically receive a 6-month extension resulting in a deadline by October 15th, 2021.

It is important for you to remember that the extension only gives you more time to file your tax return; the obligation to pay will continue to be on the date indicated by the California Department of Revenue. However, the penalty for not complying on time is much higher than the penalty for not paying on time, so requesting an extension is an excellent option for those who cannot comply on time.

How To File An Extension For California State Tax?

As mentioned above, the California Franchise Tax Board has extended the time to file and pay the taxes for taxpayers who file forms 540NR, 540, 540 2EZ, and PIT composite returns. Previously the deadline was April 15th, 2021, but now you have the opportunity to do it until May 17th, 2021.

Something very important that should not be confused with the normal tax extension is that this extension (May 17, 2021) is a relief that the FTB has decided to grant to all individuals in the state due to the economic situation that currently welcomes us. To benefit from this extension, you do not need to fill out any form or report to the FTB, it is an automatic extension that you can use in your favor without meeting any other requirement and covers both filing and paying extensions.

On the other hand, we have the regular California state tax extension. This is an option for those taxpayers who cannot file their tax returns on time because they do not have all the necessary data to complete the return. Unlike the previous extension, this is only to extend the time in which we must file our tax returns. This means that the payment must be made no later than May 17th, 2021, to avoid having to pay penalties.

Generally, this 6-month extension must be formally requested by completing a form and sending it to the department. However, this year in the state of California the extension for filing your taxes is also automatic, no form is required. This means you can file your tax return until October 15th, 2021.

In other words, this year you have 2 tax extensions:

  1. The one decreed by the IRS and the California FTB: the date to file and pay your taxes has been extended. It is no longer April 15th, 2021; rather you have the chance until May 17th, 2021.
  2. The California State Tax Extension: It is an automatic 6-month extension only for filing your tax return (October 15th, 2021). The obligation to pay maintains its deadline (May 15th, 2021).

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California State Tax Extension E-File

The way to inform the California FTB that you will use the extension to file your taxes is very simple.

In California, as in many other states, you can file and pay your taxes online. You must have an account to be able to do the process, on this page you can register. If you already have an account, you just have to complete the next step.

As the payment obligation is earlier than that of filing your tax return, when you go to make the payment you must select the extension option, but how do you do this? Enter Web Pay, fill in your details, and when paying select “extension”.

If you are one of the people who do not like to do this type of procedure online, you can also do it by Mail. Download this form and complete your information. You can make the payment through a check or money order made out to the “Franchise Tax Board”. In an envelope, place the 2 documents (form FTB 3519 and your check or Money order, but don’t staple them) and send it to Franchise Tax Board, PO BOX 942867, Sacramento CA 94267-0008.