2023 Tax and AB-150 Passthrough Entity Payment Reminders

The flooding disaster tax relief in California granted most California taxpayers automatic extensions for filing their 2022 tax returns and paying any taxes due; in addition, the due date for 2023 estimated tax payments was extended to October 16, 2023. Thus, 2023 1^st, 2^nd, and 3^rd quarter estimated tax payments are all due on October 16th.

California taxpayers making a single estimated tax payment exceeding $20,000 should be aware of California’s mandatory e-pay law. Once this threshold is met, taxpayers must make all future California tax payments electronically using the California Franchise Tax Board’s web pay service, or they will be assessed a 1% penalty for individuals and a 10% penalty for businesses for any payment made by check. 

If your total estimated tax payments due on October 16^th for California exceed $20,000, you might consider splitting this payment by issuing multiple checks to avoid the mandatory e-pay requirement. To be conservative, you might split these payments up on different days leading up to October 16^th. If you are already subject to California’s mandatory e-pay requirement, please remit your payments electronically.

For Passthrough business entities, another payment that received an extension is the California Pass-Through Entity (PTE) elective tax payment for 2023. As we have already filed tax returns for most of our partnership and S-corporation clients, we would like to remind those who are electing into the PTE about the October 16, 2023, PTE payment deadline. Untimely payment of this obligation will make a client ineligible for the potential tax benefits of the PTE for 2023.

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We want to ensure you avoid penalties by making timely tax payments.  If you need any assistance or have further questions about these payments, please don’t hesitate to contact your accountant directly or reach out to our office.