You may be thinking about setting up a California state tax payment plan if you’re having trouble paying what you owe in state taxes in California. It’s important to know what you need to do to avoid penalties if you’re unable to pay your tax bill in full at this time.
Can You Make Payments on California State Taxes?
Yes, California offers taxpayers the option to set up a California state tax payment plan. You’ll need to meet some basic eligibility requirements in order to be approved. Once that’s done, you will make consistent monthly payments.
Can You Pay California State Taxes in Installments?
The state typically gives a taxpayer three to five years to pay off a balance once a California state income tax payment plan has been granted. As an individual, you’ll need to pay a $34 setup fee that is added to your balance when setting up a payment plan. Businesses, meanwhile, are typically required to pay off what’s owed within a 12-month window and must pay a $50 setup fee.
Business/Personal
You can apply for a California state tax payment plan as an individual or business owner. The two payment plans operate quite differently – and individuals have a much larger repayment window than businesses. A business installment agreement can be granted to a corporation, limited liability company, or partnership.
What Are the Conditions? Who’s Eligible?
As an individual taxpayer, you’ll need to meet some basic conditions before being granted a California tax payment plan. Keep in mind that you should continue to make payments on what you owe while your request is being processed. This will help you to avoid new interest, penalties, collections actions, or wage garnishment. Here’s a rundown of what’s needed to be eligible:
- You owe less than $25,000 in state taxes.
- You’re capable of paying the full amount due within 60 months.
- You’ve filed all income tax returns for the past five years.
You may be able to apply online if you meet the criteria. However, you’ll be required to speak with a tax agent if you already have a current installment agreement, wage garnishment, bank levy, or other collection action in place. You’ll likely be asked to prepare a financial statement. Of course, there’s no need to make the call alone once you get a tax expert working on your behalf to get a California state income tax payment plan in place.
What Is the Process?
The first thing you’ll need to do is pay your setup fee. You will then be on your way to making monthly payments until your tax bill is taken care of in full. It’s advised that you have all tax returns prepared professionally going forward to ensure that you can comply with the state’s requirement that all future income tax returns are filed on time. In addition, you’re required to pay all future income taxes on time.
How Can Tax Group Center Help?
Tax Group Center is here to get you through the process of qualifying for a tax payment plan in California. If necessary, we can walk you through the process of seeking hardship status to get tax relief in California. The team of licensed tax professionals, CPAs, and lawyers at Tax Group Center is here to help you set up a payment plan for your California income tax. Rest assured that we’ll do everything possible to make the process as quick and seamless as possible. Contact us today!
The state typically gives a taxpayer three to five years to pay off a balance once a California state income tax payment plan has been granted. As an individual, you’ll need to pay a $34 setup fee that is added to your balance when setting up a payment plan. Businesses, meanwhile, are typically required to pay off what’s owed within a 12-month window and must pay a $50 setup fee.
