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money orders payable in U.S. dollars and drawn against a U.S. financial

Tax on Early Distributions. The tax on early distributions from qualified

institution.

retirement plans does not apply to any of the following:

Mail to: FRANCHISE TAX BOARD

• 2016 IRA contributions withdrawn during the year or 2015 excess

PO BOX 942867

contributions withdrawn in 2016 before the filing date (including

SACRAMENTO CA 94267-0001

extensions) of your 2015 income tax return.

• Excess IRA contributions for years before 2015 that were withdrawn

If you are paying tax for a previous year, you must complete that taxable

in 2016, and 2015 excess contributions withdrawn after the due date

year’s version of form FTB 3805P. If you have filed your Form 540 or

(including extensions) of your 2015 income tax return, if no deduction

Long Form 540NR for the previous year and you have no adjustments to

was allowed for the excess contributions, and the total IRA contributions

income that require you to file Form 540X, Amended Individual Income

for the taxable year for which the excess contributions were made were

Tax Return, file only form FTB 3805P.

not more than $5,500 or $6,500 if age 50 or older at the end of 2015 (or

D Definitions

if the total contributions for the year included employer contributions

to a SEP IRA, increase the $5,500 by the smaller of the amount of the

Qualified Retirement Plan – A qualified retirement plan includes:

employer contributions to the SEP or $52,000), for taxable years before

• A qualified pension, profit-sharing, or stock bonus plan.

2002, refer to federal Form 5329 instructions.

• A Keogh plan.

• The part of your IRA distributions that represents a return of

• A qualified cash or deferred arrangement (CODA) described in IRC

nondeductible IRA contributions figured on federal Form 8606.

Section 401(k).

• The part of your IRA distribution that represents a return of

• A qualified annuity plan.

nondeductible contributions made before 1987.

• A tax-sheltered annuity contract.

• Distributions from a traditional IRA that are converted to a Roth IRA.

• An individual retirement account or an individual retirement annuity.

• Distributions rolled over to another retirement arrangement or plan.

Coverdell ESAs and Archer MSAs are not qualified retirement plans.

• Distributions of excess contributions from a qualified cash or deferred

arrangement.

Traditional IRA – An individual retirement account or an individual

• Distributions of excess aggregate contributions to meet

retirement annuity described in IRC Sections 408(a) and (b), including a

nondiscrimination requirements for employer matching and employee

simplified employee pension (SEP) IRA, but not including a SIMPLE IRA

contributions.

or a Roth IRA.

• Distributions of excess deferrals.

SEP IRA – An employer-sponsored plan under which an employer can

• Amounts distributed from unfunded deferred compensation plans

make contributions to IRAs established for its employees. The term

of tax-exempt or state and local government employers. (IRC

SEP IRA means an IRA that receives contributions made under a SEP. The

Section 457 plans.)

term SEP includes a salary reduction described in IRC Section 408(k)(6).

See the instructions for line 2 for other distributions that are not subject

SIMPLE IRA – A written arrangement established under

to the tax.

IRC Section 408(p) that provides a simplified tax-favored retirement

Coverdell ESAs – A trust or custodial account described in IRC

plan for small employers. A SIMPLE IRA can be an individual retirement

Section 530 that is created or organized in the United States exclusively

account or an individual retirement annuity.

for the purpose of paying the qualified higher education expenses of the

Roth IRA – An IRA that meets the requirements of IRC Section 408A.

designated beneficiary of the account.

Generally, for purposes of this form, the same rules that apply to

Taxpayers may deposit up to $2,000 per year for taxable years beginning

traditional IRAs apply to Roth IRAs. For additional information about

on or after 2002 into a Coverdell ESA for a child under age 18. The total

Roth IRAs, get federal Publication 590-A, Contributions to Individual

contributions (by all taxpayers) for the child during the taxable year may

Retirement Arrangements (IRAs), and federal Publication 590-B,

not exceed $2,000 for taxable years beginning on or after 2002 and each

Distributions from Individual Retirement Arrangements (IRAs), federal

contributor is subject to the contributions limit of IRC Section 530(c)

Form 8606, Nondeductible IRAs, and FTB Pub. 1005.

based on adjusted gross income.

Early Distributions – Generally, any distribution from your qualified

Distributions from a Coverdell ESA that exceed the child’s qualified higher

retirement plan, annuity, or modified endowment contract that you

education expenses in a tax year are generally subject to income tax and

receive before you reach age 59½ is an early distribution. The portion of

to an additional tax of 2½% (figured in Part II of form FTB 3805P).

the early distribution that is included in income is subject to an additional

2½% tax. (If the early distribution is from a SIMPLE retirement plan

Tax Benefits for

For additional information, see federal Publication 970,

received during the first two-year period beginning on the date you first

Education.

began participating in the plan, the portion included in income is subject

Archer Medical Savings Accounts (MSAs) – A tax-exempt trust or

to an additional 6% tax.)

custodial account set up in the United States exclusively for paying the

Rollover – A tax-free distribution (withdrawal) of assets from one

qualified medical expenses of the account holder in conjunction with a

qualified retirement plan that is contributed to another plan. You must

high deductible health plan. Federal law does not treat an RDP individual

complete the rollover within 60 days following the distribution for it

as a spouse in connection with the tax treatment of an Archer MSA.

to qualify for tax-free treatment. Any taxable amount not rolled over

Federal Form 8853, Archer MSAs and Long-Term Care Insurance

within 60 days should be included in income and may be subject to an

Contracts, is used to report general information about new MSAs, to

additional 2½% tax. Get federal Publication 590-A for more information.

figure your MSA deduction, and to figure your taxable distribution

Effective for taxable years beginning on or after January 1, 2007, the

for MSAs. California law is the same as federal law regarding MSA

IRS allows a one-time rollover from an IRA to a HSA. California does

contributions and deductions but is different regarding the amount

not conform to this provision. Under California law any distribution from

of additional tax on MSA distributions not used for qualified medical

an IRA to a HSA must be added to adjusted gross income (AGI) on the

expenses. The additional tax is 12.5% for California.

taxpayer’s California return and would be subject to a 2½% additional tax

Therefore, for California purposes, there is no separate form to file

under the rules for premature distributions under IRC Section 72.

to report general information about new MSAs or to figure your MSA

Federal law allows an exception of additional tax on qualified recovery

deduction. However, if you have a taxable MSA distribution, you must file

assistance distributions. California does not conform to federal law

form FTB 3805P to figure the additional tax.

regarding qualified recovery assistance distributions.

California Achieving a Better Life Experience (ABLE) Accounts

A California ABLE program trust established exclusively for paying the

qualified disability expenses of the designated beneficiary.

Page 2 FTB 3805P Instructions 2016

Instructions For Form Ftb 3805p - Additional Taxes On Qualified Plans (Including Iras) And Other Tax-Favored Accounts - 2016 Page 2

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