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K Penalty Rates

Part III – Annualized Income

Line 3 – Enter the 2016 amounts from

the following:

The rates used to determine the amount of

Installment Method

• Form 540, line 71 and line 73.

your penalty are established at various dates

If your income varied during the year, you may

• Long Form 540NR, line 81 and line 83.

throughout the year. If an installment of estimated

be able to lower or eliminate the amount of

• Form 541, line 29 and line 31.

tax for any quarter remained unpaid or underpaid

one or more required installments by using

for more than one rate period, the penalty for that

Line 5 – Enter your 2015 tax liability from

the annualized income installment method.

underpayment will be figured using more than

the following (excluding tax on lump‑sum

Use Part III to figure the required installment

one rate when applicable.

distributions and accumulation distribution of

amount to enter on Worksheet II, Regular

trusts):

The following rates apply to the 2016

Method to Figure Your Underpayment and

computation period:

• Form 540, add line 48, line 61, line 62, and

Penalty, line 1 (page 4).

any IRC Section 453A interest from line 63,

• 3% 4‑15‑16 through 12‑31‑16

Complete line 1 through line 16 to figure your

less the amount on line 74.

current year tax, per quarter, based on your

• 4% 1‑1‑17 through 4‑15‑17

• Long Form 540NR, add line 63, line 71, line

income as you earned it. Then, complete line 17

Fiscal year filers: the rates for the periods

72, and any IRC Section 453A interest from

through line 23 to figure your required installment

July 1, 2017 through December 31, 2017 and

line 73, less the amount on line 84.

for each quarter. (The total of all amounts entered

January 1, 2018 through June 30, 2018 will

• Form 541, line 28.

on line 23 should equal the amount from Part II,

be determined by the FTB in March 2017 and

If the California adjusted gross income (AGI)

line 6.)

September 2017, respectively.

shown on your 2015 California tax return is

If you use the annualized income installment

Call the FTB’s automated phone service to get

more than $150,000, or more than $75,000

method for any payment due date, you must use

updated penalty rates. Call the number below,

if married/RDP filing a separate tax return,

it for all payment due dates. To figure the amount

and follow the recorded instructions. Enter code

then enter 110% (1.10) of the tax liability from

of each required installment, Part III automatically

number 403 when instructed.

your 2015 tax return on line 5.

selects the smaller of the annualized income

The automated phone service is available in

If the California AGI on your 2016 tax return is

installment or the regular installment (increased

English and Spanish to callers with touch‑tone

equal to or greater than $1,000,000/$500,000

by the amount saved by using the annualized

telephones 24 hours a day, seven days a week.

if MFS, enter 90% (.90) of the tax liability from

income installment method in figuring earlier

your 2016 tax return on line 5.

installments).

Telephone: 800.852.5711 from within the

United States

If you did not file a tax return for 2015, or if

If you are filing Long Form 540NR, see Long

your 2015 taxable year was less than 12 months,

916.845.6500 from outside the

Form 540NR Instructions for Part III at the end of

do not complete line 5. Instead, enter the amount

this section.

United States

from line 2 on line 6. (If your California AGI is

Line 1 – Figure your total income minus your

TTY/TDD: 800.822.6268 for persons with

equal to or greater than $1,000,000/$500,000 for

adjustments to income for each period from

hearing or speech impairments

married/RDP filing separately, use line 2.

January 1, 2016 to the ending date of each period

Specific Line Instructions

(the amounts are cumulative). Include your share

Short Method

You may use the short method only if you are

of partnership or S corporation income or loss

Part II – Computing the

items for the period.

a calendar year taxpayer and either one of the

following apply:

Required Annual Payment

Line 2 – Form 541 filers. Do not use amounts

• You made no estimated tax payments or

shown in column (a) through column (d). Instead,

Use this part to figure the amount of estimated

use 6, 3, 1.71429, and 1.09091, respectively, as

your only payments were California income

tax that you were required to pay.

tax withheld.

the annualization amounts.

Certain high‑income taxpayers are required to

• You paid estimated tax on the required

Line 6 – Multiply line 4 by line 5 and enter

use 110% (instead of 100%) of the tax shown on

due dates.

the result on line 6. Your annualized itemized

their previous year’s return in the computation

deductions are limited if, in any quarter, federal

If any payment was made earlier than the due

of the required annual payments. See the

date, you may use the short method, but using it

annualized income (use Federal Annualized

instructions for line 5.

may cause you to pay a larger penalty than using

Income Worksheet below) is greater than:

Line 1 – Enter your 2016 tax liability from

the regular method. If the payment was only a few

• $364,923 (married/RDP filing jointly or

the following (excluding tax on lump‑sum

days early, the difference is likely to be small.

qualifying widow(er)).

distributions and accumulation distribution of

• $182,459 (single or married/RDP

You may not use the short method if either of the

trusts):

following apply:

filing separately).

• Form 540, add line 48, line 61, line 62, and

• $273,692 (head of household).

• You made any estimated tax payment late.

any IRC Section 453A interest from line 63,

• You answered “Yes” to Part I, Question 3.

less the amount on line 74.

If you can use the short method, complete

• Long Form 540NR, add line 63, line 71,

Part II, line 1 through line 10 to figure your total

line 72, and any IRC Section 453A interest

underpayment for the year, and line 11 through

from line 73, less the amount on line 84.

line 13 to figure the penalty.

• Form 541, line 28.

(continued on page 3)

Federal Annualized Income Worksheet

Estates and trusts do not use the period ending dates shown to the

(d)

(a)

(b)

(c)

right. Instead, use the following: 2/29/16, 4/30/16, 7/31/16,

1/1/16-12/31/16

1/1/16-3/31/16

1/1/16-5/31/16

1/1/16-8/31/16

and 11/30/16.

1 Enter your federal adjusted gross income* for each period

(see instructions federal Form 2210, Schedule A1, Part I,

line 1). (Estates and trusts, enter your taxable income

without your exemption for each period.) . . . . . . . . . . . . . . . .

2 Annualization amounts. (Estates and trusts, see instructions

federal Form 2210, Schedule A1, Part I, line 2) . . . . . . . . . . . .

2.4

1.5

3 Annualized federal income. Multiply line 1 by line 2 . . . . . . . .

*Note: If you are a military servicemember domiciled outside of California, subtract your military pay from your federal AGI.

Page 2 FTB 5805 Instructions 2016

Instructions For Form Ftb 5805 - Underpayment Of Estimated Tax By Individuals And Fiduciaries - 2016 Page 2

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