Common questions about Individual California Direct Deposit of Refund Electronic / Payment in Lacerte

In this article you can find answers to frequently asked questions regarding the direct deposit of refunds and electronic payments for individual California tax returns within Lacerte, including estimated taxes and extension payments.

Table of contents:

Electronic Payment of California Estimated Tax for Individuals and Fiduciaries

Lacerte supports the electronic payment of California estimated tax for both Individual and Fiduciary returns.

To set up direct deposit of refund or electronic funds withdrawal for Individual (1040/1040-X) returns in Lacerte:

1. Navigate to Screen 3, Miscellaneous Information/Direct Deposit.
2. From the left-hand panel, select Direct Deposit of Refund/Electronic Payment.

To set up direct deposit:

1. Check the box for Direct deposit of federal refund.
2. If banking information from a prior year is present, review it and select the Bank account information verified box.
3. For new banking details, scroll to Financial Institution #1 and enter the relevant fields.

To set up electronic funds withdrawal:

1. Under the Electronic Filing Only - Main Form section, mark the Electronic payment of balance due checkbox.
2. The payment date will automatically default to the tax return's due date if the return is e-filed on or before the due date; otherwise, the transmission date will be used.
3. Verify all payment information by reviewing the e-file payment record.
4. By default, the full balance due will be transmitted. To set up a partial payment, enter the desired amount in the Form 1040 payment (defaults to amount due) [O] field within the Miscellaneous section of Screen 3.

Submitting Electronic Extension Payments for CA Form 3519

To indicate that the state requires electronic payments in Lacerte (this applies broadly to both estimated and extension payments meeting the criteria):

1. Go to Screen 3, Miscellaneous Information/Direct Deposit.
2. Scroll to the California Miscellaneous section.
3. Select the box for Requires electronic payments (Code 1105).
   • When this box is selected, Lacerte will include sections in the filing instructions and client letter, instructing taxpayers to transmit payments to the FTB electronically using either FTB Web Pay or credit card.
   • This selection also suppresses forms 540-ES and/or 540-V.

Steps to Submit Electronic Extension Payments for CA Form 3519 in Lacerte:

1. Go to Screen 9, Extensions.
2. Under Automatic Extension (4868), enter 1 in the field 1=automatic extension, 2=blank (MANDATORY).
3. Locate the California Information section.
4. Check the box to Efile California state extension. This action is specifically for the extension payment.
5. Complete the following applicable fields for Form 3519:
   • Income tax (-1=none)[O]: Overrides the total tax liability calculation. Enter -1 if the total tax liability is zero.
   • Income tax withheld [O]: Overrides the income tax withheld calculation. Enter -1 if the withholding is zero.
   • 2024 estimated tax payments [O]: Overrides the estimated tax payments calculation. Enter -1 if estimated tax payments were not made.
   • Other payments and credits [O]: Enter excess State Disability Insurance (SDI) tax. Enter -1 if excess SDI is zero. This overrides the excess SDI calculation.
   • Form 3519 payment (defaults to amount due) [O]: Lacerte calculates the extension payment based on return entries or your overrides in this section. Enter a different amount here if the taxpayer is paying an amount different from the calculated amount.
6. Go to Screen 1, Client Information.
7. Scroll down to the Taxpayer Contact Information section and ensure a phone number is entered.
8. Go to Screen 3, Miscellaneous Info./Direct Deposit. Under the Miscellaneous section, ensure the Daytime phone: 1=print, 2=print (suppress when options), 3=suppress [O] field is not marked to suppress the phone number. If suppressed, the extension will likely reject with an error such as /CA-PaymentRequest/CA-PaymentRequestData/CA-Payment/PaymentInformation. This option is also available under the User Options - Tax Return tab.
9. Scroll to the Direct Deposit of Refund / Electronic Payment section and complete the Financial Institution #1 section.
10. Scroll down to the California Direct Deposit of Refund / Electronic Payment section and check the box for Electronic payment of tax due with extension. You only need to enter bank information in this section if it differs from the federal return's banking information.
11. Once these steps are completed, select the E-File menu and choose Start e-file extension wizard... to submit the California extension with payment.
    • Important Note: If you are electronically filing the federal extension simultaneously, the California extension must be unchecked in the e-file wizard to prevent it from generating an error.

Tax payments cannot be made electronically with an extension after the extension deadline has passed.

Resolving California E-File Diagnostics Related to Electronic Payments

Certain e-file critical diagnostics may arise when dealing with California electronic payments. These diagnostics typically indicate that the State of California requires an amount due for an extension to be paid electronically via direct debit.

Common diagnostics include:

• Individual: Ref. #47233
• Partnership: Ref. #47294
• Corporate: Ref. #47293
• S-Corporate: Ref. #47312
• Fiduciary: Ref. #47241
• General: Ref. #47605 (also related to California extensions and electronic payments)

These diagnostics frequently appear when the Electronic payment of estimated tax checkbox is selected in the California Direct Deposit of Refund/Electronic Payment section of Screen 3, Miscellaneous Information, even if the "Requires electronic payments" box in the California Miscellaneous section is not marked.

The errors usually specify missing or invalid California electronic payment estimated tax account information (account number, account type, and RTN).

To resolve these diagnostics:

1. Go to Screen 3, Miscellaneous Information/Direct Deposit.
2. Scroll to the California Direct Deposit of Refund/Electronic Payment section.

Uncheck the box for Electronic payment of estimated tax.

Related Articles

• California Individual and Fiduciary Electronic Payment of Estimated Tax
• E-File Critical Diagnostic for CA Electronic Payment of Estimated Taxes with E-Pay Requirement
• Submitting electronic extension payments for CA Form 3519 in Lacerte
• How to resolve Lacerte Diagnostic Ref. 47233, Ref. 47294, Ref. 47293, Ref. 47312, Ref. 47241, and Ref. 47605