On Wednesday, January 4, 2017, The Franchise Tax Board (FTB) announced that they began accepting 2016 state tax returns for a filing season that extends through April 18, three days beyond the traditional deadline because of a federal holiday. FTB encouraged taxpayers to take advantage of the agency’s online services and take extra steps to protect themselves and their refunds.
Free filing help is available for many taxpayers with limited incomes, and is often available on military bases for service members. For a list of Volunteer Income Tax Assistance Program locations throughout California, go to ftb.ca.gov and click on free filing assistance.
Second Year of State Earned Income Tax Credit
Last year, California began offering its own Earned Income Tax Credit (CalEITC) to many people who make use of the federal EITC. The CalEITC is refundable, meaning that taxpayers will receive money if the credit is greater than taxes owed.
The state credit is available to California households with adjusted gross incomes of $6,717 or less if there are no qualifying children; $10,087 or less with one qualifying child; or $14,161 or less with two or more qualifying children. Unlike the federal EITC, the CalEITC is based only on income that was reported on a W-2 form (such as wages, salaries, and tips) and was subject to California withholding. Income from self-employment cannot be used to qualify for the CalEITC.
More details about the credit are at CalEITC4me.org.
Better FTB Online Services
The Franchise Tax Board has enhanced the MyFTB website where users can find their tax documents, check balances due, access tax calculators, send secure messages to FTB staff, and more. Since its launch, more than 450,000 taxpayers have registered with MyFTB.
FTB offers free electronic filing for state tax returns through CalFile, an easy-to-use tool available to more than 6.4 million taxpayers. CalFile allows taxpayers to file directly with FTB and provides instant confirmation. Taxpayers can also find a list of other free and fee-based filing options at ftb.ca.gov.
Prevent Identity Theft and Refund Theft
In 2015, more than 1.2 million fraudulent tax returns were filed with IRS, each an attempt to steal a taxpayer’s federal refund. The Better Business Bureau also reported that tax-related scams in 2016 were the largest and most-often reported scams used against businesses and consumers. To combat this growing crime, FTB has joined an IRS-led partnership of public agencies and software companies brought together to identify and stop false returns at the time of filing.
Tax professionals and taxpayers should also stay alert by:
- Avoiding email when discussing confidential tax matters. Instead, use secure online services such as MyFTB.
- Watching for phishing schemes. For example, be wary of any caller threatening jail for nonpayment. Report any potential scams to FTB.
- Filing early if possible. The sooner FTB has your tax return, the sooner FTB staff can verify it and process a refund.
- Using online resources like the California Attorney General’s site at https://oag.ca.gov/idtheft for safety tips and information on data breaches.
Increased Standard Deductions and Exemption Credits
For the 2016 tax year, the standard deduction for single or filing separately tax statuses increased to $4,129. For joint, surviving spouse, or head of household filers, the deduction grew to $8,258.
The dependent exemption credit increased to $344 per dependent. The personal exemption amount for single, filing separately, and head of household filers increased to $111. For joint or surviving spouses, the exemption grew to $222.
Walk-in service is still available at six regional FTB field offices weekdays between 8 a.m. and 5 p.m. The field offices are in Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and Santa Ana. Taxpayers may pay using MasterCard, Visa, American Express, Discover, debit card, check, cashier’s check, or money order. A service fee of 2.5 percent is charged for credit card transactions.
FTB administers two of California’s major tax programs: Personal Income Tax and the Corporation Tax. FTB also administers other nontax programs and delinquent debt collection functions, including delinquent vehicle registration debt collections on behalf of the Department of Motor Vehicles, and court–ordered debt. Annually, FTB’s tax programs collect more than 65 percent of the state’s general fund. For more information on other taxes and fees in California, visit taxes.ca.gov.