Software not filling out form 2024 FTB 5805 (Late Penalty) correctly

@310mjh 

True...with a BUT.

The BUT, is that the software forms for the CA Form 5805 is not scheduled to be implemented until on/after 23 January.  So, one wonders if the right amount was in the database from the transferred in 2023 datafile, but the current 5805 doesn't have the number in it since it will only be directed to the correct spot in the final Form 5805.

___________________

I suggest you do not file anything until AFTER the IRS starts accepting Federal files (around/after 29 January), and when you are ready, after that date, check for all updates (if using desktop software) and then go thru all the CA Q&A again to make sure all is in the correct spots.....including a re-examination of the FTB form 5805.

Also note that the next line, Part II line 6, is not calculation correctly. If you have CA AGI of over $75/150k (depending on filing status) it is still calculating the minimum payment at 100% rather than 110% if you manually input the amount. However today is only 1/22 so hopefully it will be updated tomorrow.

BTW, where in the heck is that forms update schedule? I thought I had it bookmarked but can't find it, and couldn't find by a search here. Thanks.

@babyrd55 

Here's the forms availability tool. 

But remember it is only the "expected" date for the forms to be ready...sometimes something fouls up, and they change the date a few days later.

Intuit App

Thank you for the link.

Although it's now marked as ready to print/file, CA 5805 is still not working correctly. Part II line 5 is NOT entering the number from last year's return automatically, and line 6 is still calculating required payment at 100%, not 110%. Fortunately that doesn't make a difference for me as I paid enough, but wondering if the FTB will actually accept it with a bad number on it.

This is still not working.  The software is not transferring our 2023 AGI to the worksheet to enable the 90%, 100%, or 110% calculation to determine if you paid sufficient estimated taxes.  I can overide the cells, but don't want to.  I like it best when the software does the work!

Would you be able to provide a token number for me so we can further look into this?   I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent” *
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number (including the dash) that was generated in the response.

*(If using a MAC, go to the menu at the top of the screen, select Help, then, “Send Tax File to Agent”)

I can, but I already filled out the missing fields manually.  Is that okay?

I printed out a copy of my return to check all of my input numbers. The only thing that says "do not file" are the 1040-ES forms (noted in the tax availability schedule as available tomorrow). That doesn't tell me for sure what will happen with the CA-5805 when I try to efile, but I could at least paper file.

BTW marilynsanta, you are not overriding the slot, as there is no number trying to compute there and it's not locked in any way I can see. You're just manually inputting an amount, same as filling in something like Line 1 on a 1099-INT. Granted, you shouldn't have to do this, but it's not like you're trying to override your tax due computation to zero or something crazy like that.

As of today 3/8/2025, I still had to override the numbers to get to a $0 penalty. I paid via estimated taxes 110% of 2023 actual, so there should not have been a penalty (as far as I understand).  Thanks for the confirmation.

If you'd like, we can look at your return and see exactly what you see to  help come to a resolution. The return will be scrubbed and won't include any of your personal details.

If you're using TurboTax Online:

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

If you're using TurboTax Desktop:

• Click on Online in the top menu of TurboTax Desktop for Windows
• Select 'Send Tax File to Agent'
• Write down or send an image of your token number and state then place in this issue.
• We can then review your exact scenario for a solution

Please reply to this message with your token so that we can further assist you. Let us know all other states, if any, that are included on the return.

@marilynsanta 

Have gone through all the steps (desktop version), entered all data. In my case form 5805 (UNDERPAYMENTMENT penalty) not generated AT ALL.

Can't efile or Calif will debit my bank for the penalty (not owed).

Thoughts?

Thanks.

lydlen, I can tell you that once I got the correct 2023 tax amount onto the 5805 worksheet in TurboTax, the 5805 itself did not print at all with my return. If this is the case I would not worry about it - the state obviously knows what you paid last year also. (Of course, I don't know if TT submitted something with the electronic filing that we just don't see that's a 5805 equivalent.)

If you're using the annualization method, however, I am not sure if the form should print or not, but I would tend to think yes it should. In that case the state does not know your individual circumstances that lead to the situation.

If TT is not giving you a 5805 at all to fill in in the program, then presumably it thinks that you have met another exception, such as being within $500 of 90% of your 2024 tax bill. Note on Part II line 4 that if you don't owe the penalty for this reason then do not file 5805.

Hopefully someone from TT can jump in here and give a definitive answer to these questions - I'm just answering to the best of my knowledge but can't guarantee that I'm entirely correct.

TT is not giving me a 5805 at all to fill in in the program.

Neither of the conditions apply. I owe more than $500 and have not paid 90%.

Furthermore, California EXPLICITLY says that if you efile without a 5805, they will calculate your penalty and debit your bank account.

Thanks for trying but I don't want to struggle to get my penalty back given what they say.

Which version of TurboTax are you using? Did you see an Underpayment Penalty section in the California interview?

TurboTax Desktop will create a Form 5805 based on your answers to the interview in the California return under Other Situations, Underpayment Penalty.

@lydlen 

Thanks for the reply.

Using DESKTOP premier updated today.

YES/Filled out entire underpayment section.

I do not qualify for the $500 or 90% of 2024 exemptions.

I DO qualify for the 110% of 2023 exemption. (But will be billed without 5805.)

Any thoughts?

According to the form, If you qualify for the 110% of 2023 exemption, or another exemptions, then the Form 5805 is not required to be submitted.

Form 5805 (FTB is not posting 2024 forms, but this has not changed) states:

IMPORTANT: In most cases, the Franchise Tax Board (FTB) can figure the penalty for you and you do not have to complete this form. See General Information B. If you meet any of the following conditions, you do not owe a penalty for underpayment of estimated tax. 

Do not complete or file this 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 2023 or 2024 was less than $500 (or less than $250 if married/RDP filing a separate return). 

• Your 2023 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 2024 return or 100% of the tax shown on your 2023 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 2022 tax return if they do not meet one of the two conditions above.
 

@lydlen

Thank for the response, HOWEVER, if I don’t fill in the form (and override the calculated field), it says I owe $92 in penalty.  

In the California return, the Underpayment Penalty questionnaire doesn't appear unless TurboTax has tentatively calculated a penalty based on the income and payment information you entered. 

In that case, you will see Underpayment Penalty listed as an item under Other Situations and you may also see a screen prompt before you get to the end of the California items asking if you want to go over the penalty section now. Respond "yes" to "Would you like to review this topic?". If yes, you are given the choice to let the Franchise Tax Board calculate the penalty and send you a bill, or to complete the questionnaire.

You can avoid the penalty 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 2023 or 2024 was less than $500 (or less than $250 if married/RDP filing a separate return). 

• Your 2023 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 2024 return or 100% of the tax shown on your 2023 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 2024 tax return if they do not meet one of the two conditions above.

Complete the questionnaire rather than attempt to override the form. If your answers to the questionnaire result in eliminating the penalty, then Form 5805 won't be included with your return. If you otherwise are liable for the penalty, the FTB will calculate it. 

See this FTB webpage for more information about California penalties.

@marilynsanta 

MonikaK1,

The genesis of this thread was that TurboTax is not carrying the 2023 CA state liability correctly onto the 5805 at Part II line 5. If this were fixed - and I'm pretty sure it worked in prior years - then much of the question/confusion at this point would never occur because TT would correctly calculate no penalty. Does TT have any plans to fix that issue?

Personally I always pay in enough to avoid the penalty and the only times I've seen the form come up in the past are when I needed to use the annualization method due to some odd transaction late in the year bumping my taxes. Even if my tax liability increased significantly year-to-year I've never had to deal with this before as (presumably) TT did fill in that 5805 slot correctly so the form never showed up, just sat on the sidebar (I use direct entry rather than interview).

I just tested this with TurboTax Desktop. I entered a large amount for the 2023 tax where prompted in the Underpayment Penalty interview in the California return, and TurboTax correctly used 110% of that amount on Form 5805, Part II, Line 5. 

The Underpayment Penalty interview doesn't appear in the California return unless TurboTax has tentatively calculated a penalty based on the income and payment information you entered. 

In that case, you will see Underpayment Penalty listed as an item under Other Situations and you may also see a screen prompt before you get to the end of the California items asking if you want to go over the penalty section now. Respond "yes" to "Would you like to review this topic?". If yes, you are given the choice to let the Franchise Tax Board calculate the penalty and send you a bill, or to complete the questionnaire.

@babyrd55 

As of now, FTB 5805 line 5 is still not computed correctly. I have done several updates, but the problem persists.

I have created  a sample return with large CA tax due in 2024. 

token number is: 810997105-28098726

No matter what CA tax 2023 (last year) is in CA carryover worksheet, line 5 of FTB5805 is computed using a number totally unrelated to it. It is supposed to be either 100% or 110% of 2023 CA tax.

Thank you for the data file. I see where the figure on Line 5 of the Form 5805 is coming from. It appears to be correctly using 90% of the current year liability because the AGI was over $1,000,000 in the sample return.

If you right click in a numerical field and select "Data Source" from the pop up screen, TurboTax should show the data source for that field. In this case, it provided a window that states for Line 5:

If the California AGI is less than $1,000,000 ($500,000 if married/RDP filing separately) then from:

Carryover Worksheet P/Y Tax Liability 
minus

Carryover Worksheet P/Y Tax on Lump Sum Dist 
minus

Carryover Worksheet P/Y Excess CA SDI Tax W/H

Otherwise from Line 2: (which was 90% of the current year tax).

The AGI on the test return exceeded $1,000,000, so the Form 5805 used the amount on Line 2 for Line 5.

The 2023 instructions for the form state:

If the California AGI on your 2023 tax return is equal to or greater than $1,000,000/$500,000 if married/RDP filing separately, enter 90 percent (.90) of the tax liability from your 2023 tax return on line 5.

The 2024 form states for line 6:

6 Required annual payment. Enter the smaller of line 2 or line 5. (If your California AGI is equal to or greater than $1,000,000/$500,000 for married/RDP filing a separate return, use line 2)

I am referring for further review the fact that the data source pop up window for Line 5 is confusing. The instructions for the form do state that if the AGI is over $1mil, to use Line 2 for Line 5 as well as Line 6.

The California form itself is confusing because it doesn't show that instruction for Line 5.

[Edited 03/25/25] 5:30pm PST] 

@ca76 (edited)

Thank you! That answered my question!Well explained!