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Screen CACEst - California Composite Estimates (1120)
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Overpayment Application
Use this section to request a refund of any current year overpayment or to apply the current year overpayment to next year’s estimates.
note
The California Franchise Tax Board doesn’t want estimate vouchers filed with no amounts due. If estimates are not required, then don’t file Form 540-ES.
To calculate next year’s estimated tax liability and required payments, enter a code of
2
through 7
in the Application of current year overpayment
boxes, or enter an amount in the Form 540-ES - declaration for next year
box.Application of current year overpayment
The code options available here are the same as those on the federal Est screen. They instruct the application how to apply any current-year overpayment. The selected option affects what prints on Side 2 of the return, as well as the calculation of next year’s estimated tax payments. Enter one of the overpayment options listed in the following table, or select it from the dropdown.
Code | Result |
|---|---|
1 | Refund 100 percent of the overpayment (default) |
2 | Apply 100 percent of overpayment to next year’s estimate; refund excess |
3 | Apply to first estimate; refund excess |
4 | Apply equally to each estimate; refund excess |
5 | Apply amount specified following to each estimate until exhausted |
6 | Apply to 1st and 2nd estimates; refund excess |
7 | Apply 100 percent of overpayment to next year’s estimate; no refund |
8 | Apply amount specified following |
note
New clients and converted clients may benefit from California’s new client options. Select Setup, 1120 Corporation, California tab, select New Client Options, and then enter the code at
Overpayment application
. The selection here transfers to the state input screen for newly created and converted clients and is used to calculate the overpayment application. The transferred code may be changed here if necessary and is not replaced by the selection in the New Client Options window.Estimates
To calculate the estimated tax liability and required payments for next year, make an entry for
Form 540-ES - declaration
for next year
.Form 540-ES - declaration for next year
note
Calculated estimated tax payments are allocated to each quarter at 30%, 40%, 0%, and 30% per state law. Only codes 5 and 9 generate a 3rd quarter estimate.
Codes
1
, 2
, 3
, 5
, and 9
used in this box are the same as those used in the federal Est screen. They tell the application which method to use to determine the amount of the next year’s estimated regular tax. If a code 2
through 7
is entered for Application of current year overpayment
, the application defaults to option 1
for Form 540-ES - declaration for next year
. If both of these are blank, the application doesn’t
generate estimate vouchers or estimate filing instruction information. The estimate options are listed in the following table or can be selected from the dropdown.Code | Result |
|---|---|
1 | Use the current-year income tax liability. This is the default if you enter code 2 through 7 in for Application of current year overpayment . Estimates are prepared if the current-year income tax liability is equal to or greater than $500. |
2 | Use the current-year income tax liability plus the adjustment in Amount to adjust current year liability (Code 2) . If using this option, also enter an adjustment to the current-year tax liability for Amount to adjust current year liability (Code 2) . If the adjustment represents a decrease, enter a negative amount. |
3 | Use the current-year income tax liability. Estimates are prepared even if the current-year tax liability is less than $500. |
4 | Print vouchers with the amount boxes blank. Estimate vouchers are prepared with the client’s name, address, phone number, and federal ID number, and blank amounts due. |
5 | Use the amounts entered for Amounts for next year’s estimates (Code 5 or 9) before overpayment. If you select this option, the amounts entered for Amounts for next year’s estimates (Code 5 or 9) are adjusted by any overpayment applied. |
9 | Use the amounts entered for Amounts for next year’s estimates (Code 5 or 9) . If you select this option, the amounts entered for Amounts for next year’s estimates (Code 5 or 9) aren't adjusted by any overpayment applied. |
note
New clients and converted clients may benefit from California’s, new client options. Select Setup, 1120 Corporation, California tab, then select New Client Options and enter the code at
Next year estimates already paid
. The selection here transfers to the state input screen for newly created and converted clients and is used to calculate next year’s estimates. The transferred code may be changed if necessary and isn't replaced by the selection in the New Client Options window.Amounts for next year’s estimates (Code 5 or 9): 1st-4th payment
Use these to specify the composite tax estimate amounts for each quarter. These amounts won’t be adjusted by the amounts entered for
Next year estimates already paid
.If code
5
is entered for Form 540-ES - declaration for next year
, enter the desired quarterly payments here. These amounts are adjusted by the overpayment applied.If code
9
is entered for Form 540-ES - declaration for next year
, enter the desired quarterly payments here. These amounts won’t be adjusted by the overpayment applied.Next year estimates already paid: 1st-4th payment
Use these to enter any composite tax estimate payments already made toward the next year.
If code
1
, 2
, or 3
is entered for Form 540-ES - declaration for next year
, these amounts and the overpayment applied are subtracted from the calculated quarterly gross estimated tax liability to determine the net estimate amounts.If code
5
or 9
is entered for Form 540-ES - declaration for next year
, these amounts don’t adjust the amounts entered for Amounts for code #5 or #9
.Number of estimates desired, if other than 4
The number of estimate vouchers defaults to
4
. Enter a code to specify fewer than 4 vouchers. The options for the number of vouchers are in the dropdown and in the following table. The overpayment and amounts already paid toward next year’s estimates are applied to each voucher based on the overpayment code and the quarter in which the amounts were paid.Code | Result |
|---|---|
4 | 4 vouchers generate. (default) |
3 | The last 3 vouchers generate. Any unpaid balance from the 1st estimate is included in the 2nd estimate voucher. |
2 | The last 2 vouchers generate. Any unpaid balance from the 1st or 2nd estimate is included in the 3rd estimate voucher. |
1 |
100 percent of the gross estimated tax liability allocates to the 4th voucher.
A100 percent of the gross estimated tax liability allocates to the 1st voucher.B100 percent of the gross estimated tax liability allocates to the 2nd voucher.C100 percent of the gross estimated tax liability allocates to the 3rd voucher.
Amount to round up each estimate
This enables entering rounding specifications for the estimated payments. The estimated payments can be rounded up to the nearest factor indicated. For example, to round up each estimated payment to the nearest $10, enter
10
here. If this is blank, the application rounds each estimated payment up to the nearest dollar.note
New clients and converted clients may benefit from California’s new client options. Select Setup, 1120 Corporation, California tab, then select New Client Options and enter the amount at
Round estimates by
. The amount entered here transfers to the state input screen for newly created and converted clients and is used to round up the estimated payments to the nearest factor. The transferred amount may be changed in this field if necessary and isn't replaced by the selection in the New Client Options window.