california form 5805

[mhealeynd1]

why doesn't this form autopopulate?

[DawnC]

It does auto-populate but what the form populates with depends on whether or not you qualify for an exception to the penalty and whether or not you opted to annualize your income when you went through the CA state interview questions. 

Click on Forms in the upper right corner and scroll down the list of forms to the CA forms (bottom of the list) and see if Form 5805 is on the list.  If it is not in the CA list of forms, you are not required to file the form, but you can still view the form and details.  Click on Open Form (next to the Errors button) and type in 5805.  Click on the Form 5805 and select Open Form to see the details.  You can edit the form here also.   

If you meet any of the following 3 conditions, you do not owe a penalty for underpayment of estimated tax. Do not complete or file the form if:

•• The amount of your tax liability (not including tax on lump-sum distributions and accumulation distribution of trusts) less credits (including the withholding credit) but not including estimated tax payments for either 2018 or 2019 was less than $500 (or less than $250 if married/RDP

filing a separate return).

•• Your 2018 return was for a full 12 months (or would have been if you were required to file) and you did not have any tax liability on that return.

•• The amount of your withholding plus your estimated tax payments, if paid in the required installments, is at least 90% of the tax shown on your 2019 return or 100% of the tax shown on your 2018 return (110% if California adjusted gross income (AGI) was more than $150,000 or $75,000 if married/RDP filing a separate return) and you are not using the annualized income installment method. Taxpayers with California AGI equal to or greater than $1,000,000 (or $500,000 if married/RDP filing a separate return), must use the tax shown on their 2019 tax return if they do not meet one of the two conditions above.

[Edited 03/13/20 | 8:30 AM]

[bldtax]

DawnC,

Your last bullet is not quite right, see: https://www.ftb.ca.gov/forms/2019/2019-5805.pdf

"The amount of your withholding plus your estimated tax payments, if paid in the required installments, is at least 90% of the tax shown on your 2019 return or 100% of the tax shown on your 2018 return (110% if California adjusted gross income (AGI) was more than $150,000 or $75,000 if married/RDP filing a separate return) and you are not using the annualized income installment method. Taxpayers with California AGI equal to or greater than $1,000,000 (or $500,000 if married/RDP filing a separate return), must use the tax shown on their 2019 tax return if they do not meet one of the two conditions above."

And I am finding on my return that TT correctly flagged the need for IRS Form 2110 and a Federal penalty because I paid 100% but less than 110% of my TY2018 Federal liability, but it is NOT flagging the need for a CA FTB Form 5805 for similar conditions on my TY2018 CA liability. I think this is a bug in TurboTax 2019.

[DawnC]

Was Form 5805 listed in your forms or did you have to use the 'Open Forms' options?  I know you found it, but I am curious to know if it was part of your return or not.   Is Box B (have the FTB calculate the penalty) marked by any chance?  Is there an amount on Line 13 of the form?  

 And just to clarify, when you went through the federal return, you were prompted to go through the penalty section, but no penalty section on the CA return, correct? 

Thanks for the correction on the last bullet point; I will update my reply above.  

[bldtax]

DawnC,

Form 5805 is listed in my forms. If I delete it, it is regenerated. I do not have to use Open Forms to get to it.

Box B is NOT checked.

Line 13 is completely blank.

And, yes, I was taken through the full interview for the Federal penalty (and I used the annualized method), and a penalty was calculated there on the IRS Form 2110.

Form 5805 is completely blank, except for the following suspicious thing -- on the smart worksheet at the top, by line F, it says "1-Prior Yr $500/$250" next to the phrase "If penalty exception number 1 or 2 is met, the exception number will be listed to the right." This indicates to me that Turbo Tax believes the following is true: "1 The amount of your tax liability (not including tax on lump-sum distributions) less credits (including the withholding credit) but not including estimated tax payments for either 2018 or 2019 was less than $500 (or less than $250 if married filing a separate return)." This is most DEFINITELY NOT true in my case. My CA tax liability less withholding is a very large amount of money significantly more than $500. HOWEVER, my CA tax liability for the *previous/prior* year, TY2018, was less than $500 -- but that is not what's relevant to the penalty this year from my reading of the Form 5805 instructions.

[bldtax]

Okay, looks like Turbo Tax is right, no penalty is owed.

https://www.ftb.ca.gov/forms/2018/18-5805-instructions.html

Those are the TY2018 instructions -- couldn't find an equivalent link for TY2019 instructions, but I assume the language is similar: "If in the prior year your tax liability, less any credits for the prior year, was less than $500 ($250 for married/RDP filing separately) you are not subject to the underpayment of estimated tax penalty."

And the TY2019 5805 even says it (but it wasn't clear to me at first): "... for either 2018 or 2019 was less ..."

So CA is actually more lenient about penalties than the Feds in this circumstance -- go figure.

Anyway, sorry for the noise, mystery solved.

[tavocp]

TT is assessing an underpayment penalty for the state of CA even though I meet the third bullet point. Specifically my withholding is greater than 110% of the CA tax show in my 2018 return. Form 5805 is being populated but Part-II/Line-5 is blank when it seems like it should have my 2018 total CA tax value. I used TT for my 2018 tax preparation and for 2019 imported values from 2018. What could cause Form-5805/Part-II/Line-5 to be blank ? and how can I fix it so that TT considers this condition ?  Thanks- 

[5haughtons]

I annualized my income. Was charged an underpayment penalty by IRS but not California. 

When I finished my return and tried to file, TT opened a window headed "Exception based on last year's taxes" asking for me to provide info from my 2018 California return.  Searching in my 2018 return for the terms that TT asks for provides no results.  

What are the line items for this info that TT is asking for from my 2018 CA return? 

--2018 Tax Liability

--Tax on Lump-Sum Distributions

--CA Income Tax Withheld

--2018 CA AGI

I have paid TT. 

TT told me there were no errors. 

Now TT is preventing me from filing and asking for info that is not readily found. 

Please tell me how to complete my return. 

[5haughtons]

Please note: my return includes Form 5805.  Line 13 says no penalty is owed.

[RockinRon]

I have the same issue. Unable to file because it keeps going back in a loop

[JotikaT2]

In regards to the line items you are being asked for, see the following for the applicable lines assuming you filed a Form 540 in 2018.

• 2018 Tax Liability can be found on Line 64, page 2

• Tax on Lump-Sum Distributions can be found on Line 34, page 2 and is generated on Schedule G-1

• CA Income Tax Withheld can be found on Line 71, page 3

• 2018 CA AGI can be found on Line 17, page 2

@5haughtons