Christy Pinheiro EA

Once again, the CA Franchise Tax Board does not have the money to issue tax refunds. Sadly, this is becoming the norm here in California. Here is the information from FTB:

Due to the State’s cash flow problems, the Governor and Legislature approved legislation delaying the payment of personal income and business tax refunds until there is sufficient cash in the Treasury to pay all claims.

When will refunds be issued?
All refunds will be paid as received once a sufficient loan (known as a Revenue Anticipation Note, or RAN) is issued, or there is otherwise sufficient cash in the Treasury. Returns that have not completed processing before October 7, 2010, will have their refunds delayed until further notice.

What types of refunds are affected?
This applies to all refund types – paper and direct deposit. Delayed direct deposit refunds will be electronically transmitted when funds are available.

Why are refunds being delayed?
To confront the state’s cash problem and avoid the danger of IOUs, the Legislature approved AB 1624, which defers some payments, including Personal Income and Business Tax Refunds.

Should I wait to file my return?
No. Tax returns should be filed by the October 15 deadline, and FTB is still processing returns as normal. The refund delay does not affect the return due date.

Will you still honor my direct deposit request (DDR) when the delay is lifted?
Yes, your DDR will be honored when the State resumes the payment of refunds.

Am I entitled to receive interest because of the delay?
It depends upon the length of the delay. For individual taxpayers, interest on current year refunds is only paid if your refund is not issued within 45 days after April 15, or the date that your return is filed, whichever is later.

Can I apply my refund as an estimated payment toward my 2010 taxes?
Yes, if on your 2009 return you request that your refund be applied toward your 2010 taxes, we will apply the amount you designate when we process your return.

If I owe for other debts collected by FTB, will my refund be applied toward that debt?
Yes. You will be refunded the difference, if any, once the delay on issuing refunds is lifted.

Is it possible that I will be issued an IOU?
If the State’s cash flow problems do not improve, the State may need to issue IOUs. If this happens, you will receive a paper IOU warrant, even if you requested a direct deposit of your refund

Best, Christy

Want to become a licensed preparer? Go one step further-- become an EA! Pass theIRS enrolled agent exam with PassKey EA Review

Once again, the CA Franchise Tax Board does not have the money to issue tax refunds. Sadly, this is becoming the norm here in California. Here is the information from FTB:

Due to the State’s cash flow problems, the Governor and Legislature approved legislation delaying the payment of personal income and business tax refunds until there is sufficient cash in the Treasury to pay all claims.

When will refunds be issued?
All refunds will be paid as received once a sufficient loan (known as a Revenue Anticipation Note, or RAN) is issued, or there is otherwise sufficient cash in the Treasury. Returns that have not completed processing before October 7, 2010, will have their refunds delayed until further notice.

What types of refunds are affected?
This applies to all refund types – paper and direct deposit. Delayed direct deposit refunds will be electronically transmitted when funds are available.

Why are refunds being delayed?
To confront the state’s cash problem and avoid the danger of IOUs, the Legislature approved AB 1624, which defers some payments, including Personal Income and Business Tax Refunds.

Should I wait to file my return?
No. Tax returns should be filed by the October 15 deadline, and FTB is still processing returns as normal. The refund delay does not affect the return due date.

Will you still honor my direct deposit request (DDR) when the delay is lifted?
Yes, your DDR will be honored when the State resumes the payment of refunds.

Am I entitled to receive interest because of the delay?
It depends upon the length of the delay. For individual taxpayers, interest on current year refunds is only paid if your refund is not issued within 45 days after April 15, or the date that your return is filed, whichever is later.

Can I apply my refund as an estimated payment toward my 2010 taxes?
Yes, if on your 2009 return you request that your refund be applied toward your 2010 taxes, we will apply the amount you designate when we process your return.

If I owe for other debts collected by FTB, will my refund be applied toward that debt?
Yes. You will be refunded the difference, if any, once the delay on issuing refunds is lifted.

Is it possible that I will be issued an IOU?
If the State’s cash flow problems do not improve, the State may need to issue IOUs. If this happens, you will receive a paper IOU warrant, even if you requested a direct deposit of your refund

Best, Christy

Want to become a licensed preparer? Go one step further-- become an EA! Pass theIRS enrolled agent exam with PassKey EA Review