California State Tax Filing Season Is Officially Open – Part IV

Written by Betty Williams | Posted in Individual • North America • Tax Policy

The Franchise Tax Board (FTB) announced it is now accepting 2013 state tax returns. Also, the FTB provides the following updates on law changes and filing services brought to you in this blog series – Part IV.

Tax Tips

• Volunteer Income Tax Assistance – Starting in February, free tax help is available through the Volunteer Income Tax Assistance and Tax Counseling for the Elderly Programs (VITA/TCE). Trained volunteers at more than 1,000 sites throughout California provide free help to complete tax forms for low-income, senior, disabled, and non-English speaking persons who need to file simple federal and state tax returns.

Many military bases provide this service for the U.S. Armed Forces. For information on locations throughout California, go to ftb.ca.gov and click on the free filing assistance link.

• Use tax – Taxpayers may owe use tax on purchases made from out-of-state or Internet sellers. Use tax can be reported on the California income tax return instead of filing a use tax return with the State Board of Equalization. Taxpayers can use a “look-up” table to report their use tax obligations. The estimated amount of use tax due is based on the person’s adjusted gross income. For more details, visit the BOE’s website.

• Federal Earned Income Tax Credit (EITC)- This is a federal incentive for low-to-moderate income individuals and families. Taxpayers earning less than $51,567 can qualify for a “refundable” credit that can total up to $6,044. “Refundable” means that taxpayers do not have to have a tax liability to get a refund check from the federal government. Taxpayers can check if they qualify by visiting the IRS website at irs.gov and searching for EITC Assistant. California has no comparable state credit.

Changes for Businesses Filers

Geographically Targeted Economic Development Area (G-TEDA) Tax Incentives Repealed – The Governor’s 2013 Economic Development Initiative [Assembly Bill (AB) 93] repealed and made changes to all of the G-TEDA Tax Incentives. Enterprise Zones (EZ) and Local Agency Area Military Base Recovery Areas (LAMBRA) were repealed on January 1, 2014. The Targeted Tax Areas (TTA) and Manufacturing Enhancement Areas (MEA) both expired on December 31, 2012. AB 93 changed the credit carryover period to 10 years for any taxable year beginning on or after January 1, 2014. In addition, the EZ Employee Credit and the New Jobs Credit are also repealed as of January 1, 2014.

More information on the Repeal of the G-TEDA tax incentives can be found on FTB’s Website.

Source: FTB Public Affairs Office

In accordance with Circular 230 Disclosure

Betty Williams

Betty Williams has a broad range of experience handling civil and criminal tax controversy matters including income tax, employment tax, sales and use tax, property tax and IRS, FTB, and SBE audits, protests, and appeals. She has represented clients before the U.S. Tax Court and the U.S. District Courts in California. Betty has obtained penalty abatement for numerous clients ranging from a few thousand to more than $2 million in late filing and late payment penalties. She has assisted numerous clients in the United States and abroad in the 2009, 2011 and 2012 IRS and FTB voluntary disclosure initiatives. She also represents foreign financial institutions regarding Foreign Account Tax Compliance Act (FATCA) compliance. She has experience defending criminal tax matters and negotiating plea agreements in areas such as structuring, tax evasion, and the failure to file a tax return.