California WebPay Tracking

[RonFrank]

In California, taxpayers are required to pay their tax electronically if certain criteria are met. If a client met this criteria 5 years, then every subsequent year they must pay electronically even if below the threshold in those years. How are tax preparers keeping track of this so they know that a client is required to use Webpay.  According to a Lacerte person, Lacerte does not keep track of this anymore (she said they did up to 2020).

[itonewbie]

Based on my understanding, this requirement is not time bound.  How is 5 years relevant?

If it's a new client, that's one of those on-boarding questions I'd ask after reviewing their prior year returns.  And if they met the thresholds in the past, the question is then whether they subsequently applied for a waiver and received the approval from FTB.

[RonFrank]

I was just using 5 yrs as an example.  Once WebPay requirement is met, then it must be used in subsequent years unless a waiver is obtained.

My concern is keeping track of it. One of my clients reached this requirement about 6 years ago. Since then he has not had to pay CA tax until this year. I forgot about the requirement and he received a penalty for a 2021 extension payment. I have been using Lacerte for all these years. According to the Lacerte rep, Lacerte use to keep track of this so it printed out on the filing instructions/letter. The rep said Lacerte does not do this anymore unless the requirement is met in the current year.

[itonewbie]

But there are a lot of things Lacerte doesn't track.  That's what carryforward notes are for - these keep a running log of everything that may have a downstream impact (including elections that had been made, sometimes from years past that may no longer show up on the current return) and should be reviewed/checked off each year when a new return is prepared.  Mandatory WebPay would be one of those things in the carryforward notes.

[joshuabarksatlcs]

RE: My concern is keeping track of it. 

Lacerte Software > Screen 3 >  Misc Info, >  California Misc.,

RIght above "Prior Year Name" there is a box for "Requires electronic payments".  Once the box is checked, it'll follow the client when proforma'ed to the following year, unless it's unchecked, purposely or accidently.

For new clients, ASK!

[joshuabarksatlcs]

BTW, when a taxpayer falls into the mandate, FTB sends a notice to the Taxpayer.  IT's a :"standard" notice, which has a Notice number.