California Estimated Tax Due Dates and the 30/40/0/30 Rule

The four due dates

Weekend and holiday dates already moved to the next business day:

The April and January dates need the most care. Federal Emancipation Day (April 16, observed on the nearest weekday when it falls on a weekend) can push the April date back, and FTB has followed the federal date in those years. The January date is the other one to watch. Martin Luther King Jr. Day is the third Monday of January, so it always falls between January 15 and 21. That means whenever January 15 is a Saturday, a Sunday or MLK Day itself, the next business day is a Tuesday, and that's when the fourth payment is due. FTB prints the official dates on each year's Form 540-ES.

Why California front-loads payments

The split is written into state law. R&TC 19136.1 replaces the federal four-equal-installments rule for California with 30%, 40%, 0% and 30% for tax years beginning in 2010 or later. The effect is that 70% of the year's required amount is due by mid-June, and the September date that federal filers are used to has nothing due.

For someone whose income is steady, this simply means bigger checks earlier in the year. It's harder on people whose income arrives late, such as a freelancer who lands most of their work in the fall or an investor who sells in November. For them, the annualized income method (below) can lower the early payments.

Safe harbor (90% / 100% / 110%)

The "required annual payment" that the percentages apply to is the smaller of:

• 90% of this year's tax, or
• 100% of last year's tax, raised to 110% if last year's California AGI was over $150,000 ($75,000 for married/RDP filing separately).

High earners lose the prior-year option. If this year's California AGI is $1,000,000 or more ($500,000 filing separately), FTB requires you to base payments on this year's tax. The prior-year figure is usually the easier target, because you already know it. If you pay at least that much on time, you won't owe an underpayment penalty even if this year's tax ends up much higher.

Who has to pay

According to the Form 540-ES instructions, you generally must make estimated payments if both of these are true:

• You expect to owe at least $500 ($250 if married/RDP filing separately) for the year after subtracting withholding and credits.
• Your withholding and credits will be less than the safe-harbor amount above.

In practice, that usually means people with income that has no California tax withheld from it:

• Self-employed people, freelancers and gig workers.
• Landlords with rental profit.
• Investors with capital gains, dividends or interest, especially after a large sale.
• Retirees whose pension or IRA withdrawals have little or no state withholding.

Employees with a side business often don't need estimates at all. Raising withholding on a new DE 4 counts toward the same safe harbor. Once you make a payment over $20,000, or file a return with total tax over $80,000, all later payments to FTB must be made electronically, for example through Web Pay.

Penalties (FTB 5805)

If an installment is missed, late or short, FTB charges a penalty on the underpaid amount. It runs from that installment's due date until you pay it, or until your return's due date if that comes first. You figure it on form FTB 5805. Because each installment is measured on its own, overpaying in January doesn't erase a shortfall from June, though it does stop the June penalty from growing.

Two ways to reduce or avoid it:

• Annualize. If your income arrived unevenly, the annualized income schedule in FTB 5805 lets each installment match what you'd actually earned by then.
• File early. If you file your full-year return by January 31 and pay the whole balance, you can skip the January payment with no penalty for it.

Federal vs California side by side

On a $10,000 required payment for each, here's how the two schedules compare:

The federal safe harbor uses the same percentage tests, but it has no equivalent of California's rule that taxpayers with AGI of $1,000,000 or more must base payments on this year's tax. And because the timing differs, a plan that keeps you safe federally can still leave you short in California in April and June. Work out each one separately.

Run your numbers

Our California Estimated Tax Calculator works out your safe-harbor amount from this year's and last year's figures, tells you whether you need to pay at all, and lays out the four payments with their dates. Self-employed? The self-employment tax calculator estimates the tax your business adds.

This article is for general information only and is not tax advice or affiliated with the FTB. Farmers, fishermen and fiscal-year filers follow different rules. Check FTB's Form 540-ES instructions or a tax professional.