California Estimated Tax: Form 540-ES, Safe Harbor, and E-Pay

If you expect to owe California at least $500 in income tax beyond what gets withheld, you need to send California estimated tax payments to the Franchise Tax Board using Form 540-ES. The state runs on a 30%, 40%, 0%, 30% installment schedule rather than the four equal quarters the IRS uses, so 70% of your yearly obligation is due by mid-June. Getting the timing and the amounts right is the whole job.

Who Has to Pay

You owe estimated tax if you expect to owe $500 or more for the year after withholding and credits, and you expect that withholding and credits will fall short of the smaller of 90% of your 2026 tax or 100% of your 2025 tax. The $500 threshold drops to $250 if you’re married or in a registered domestic partnership filing separately.¹ In practice this catches self-employed workers, landlords, retirees drawing pensions, and investors with dividends or capital gains that aren’t adequately withheld.

Safe Harbor and the High-Income Trap

Pay at least 90% of your current-year tax or 100% of your prior-year tax, whichever is smaller, and you avoid an underpayment penalty. If your 2025 California AGI was above $150,000 ($75,000 for married filing separately), the prior-year figure jumps to 110% of 2025 tax.¹

The rule changes shape at the top. If your 2026 California AGI reaches $1,000,000 or more ($500,000 if married filing separately), the prior-year safe harbor goes away. You have to base your payments on actual 2026 tax.¹ A million-dollar earner who had a lean 2025 cannot lean on that small prior-year number to stay out of trouble.

Due Dates and Installment Amounts

California lists four due dates but requires only three payments, and they are not equal:²

April 15, 2026: 30% of your required annual payment
June 15, 2026: 40% of your required annual payment
September 15, 2026: nothing due; California skips this period
January 15, 2027: 30% of your required annual payment

If a due date lands on a weekend or state holiday, the deadline rolls to the next business day.³ Deadlines can also shift if you’re in a federally or state-declared disaster area, so check the FTB’s emergency relief page if a wildfire, flood, or similar event has affected you.⁴ If you’re coming off the federal system, note that treating each California installment as 25% leaves you underpaid in April and short again in June.

Filling Out Form 540-ES

Form 540-ES is a set of four payment vouchers, one for each installment period, downloadable from the FTB website.¹ Each voucher asks for your Social Security Number or ITIN (and your spouse’s or partner’s if filing jointly), your mailing address, the taxable year, and the amount for that period.

The voucher number has to match the installment you’re paying. Sending Voucher 1 with a June payment can push the money into the wrong period on your account. Confirm the tax year reads 2026, not the year you just filed. If you applied part of your 2025 overpayment toward 2026, reduce your first installment by that credit and log it in the Record of Estimated Tax Payments section of the instructions so you don’t lose track.¹

When Electronic Payment Becomes Mandatory

Revenue and Taxation Code Section 19011.5 requires you to pay electronically once either of two things happens: a single estimated tax or extension payment exceeds $20,000, or your total tax liability on any original return exceeds $80,000.⁵ The payment that trips the threshold doesn’t itself have to be electronic, but every payment after that does, regardless of amount, tax type, or year.¹

The requirement is permanent. Even if later years bring smaller numbers, you remain locked into electronic payment. Mailing a check after you’ve triggered the rule results in a 1% penalty on the amount paid, unless you can show reasonable cause and no willful neglect.⁵

How to Pay

Web Pay

Web Pay pulls funds directly from a checking or savings account at no cost.⁶ You enter your routing and account numbers to send the transfer. Through a MyFTB account you can schedule payments ahead, which helps when the April and June dates are only two months apart.

Credit Card

The FTB accepts credit card payments through an authorized processor, which charges a 2.3% service fee that doesn’t go to the state.⁷ On a $5,000 installment, that fee runs $115. Unless your card rewards clearly beat the cost, Web Pay is cheaper.

Check or Money Order

If you’re not subject to mandatory e-pay, mail a check or money order with your 540-ES voucher to the address printed in the voucher instructions.² Write your SSN or ITIN and “2026 Form 540-ES” on the check. Payment is timely if postmarked by the due date, so hold on to the mailing receipt.

If Your Income Is Uneven

Seasonal businesses, commission earners, and anyone whose income spikes in a particular quarter can calculate each installment based on income actually received through that period instead of a flat annual projection. This is the annualized income installment method, worked out in Part III of Form FTB 5805 and attached to your return.⁸

If you use the annualized method for any period, you must use it for all four. You can’t pick the quarter where it helps and skip the rest. The form compares the annualized installment to the regular one, takes the smaller, and adjusts later periods upward to recover anything the earlier periods saved.⁸

Penalties for Underpayment

Miss an installment, or pay less than required, and the FTB applies a penalty that works like interest: it runs from the due date until the payment is made or the return filing deadline arrives, whichever comes first. The rate through June 30, 2026 is 7%.⁹ Each installment period is calculated separately, so a shortfall on the 40% June installment costs more than the same dollar shortfall on a 30% installment.

Two situations can get the penalty waived. One is an underpayment caused by a casualty, disaster, or other unusual circumstance where charging the penalty would be inequitable. The other is retirement after age 62 or becoming disabled during the current or prior tax year, with reasonable cause for the underpayment.⁸ Request a waiver by completing Form FTB 5805 through the penalty calculation, writing the waiver amount in parentheses on the designated line, and attaching an explanation to your return.

A Different Schedule for Farmers and Fishermen

If at least two-thirds of your gross income comes from farming or fishing, measured against either the current or prior year, you don’t follow the 30/40/0/30 schedule at all. You can make a single estimated payment by January 15, or skip estimated payments entirely by filing and paying in full by early March (March 2, 2026 for the 2025 tax year, with 2026 following a similar timeline). Use Form FTB 5805-F to claim this treatment.¹⁰

1
Franchise Tax Board. 2026 Instructions for Form 540-ES
2
Franchise Tax Board. Estimated Tax Payments
3
Franchise Tax Board. Due Dates – Personal
4
Franchise Tax Board. Emergency Tax Postponement
5
Justia. California Code 19011.5 – Electronic Remittance of Payments
6
Franchise Tax Board. Pay by Bank Account (Web Pay)
7
Franchise Tax Board. Pay by Credit Card
8
Franchise Tax Board. 2025 Instructions for Form FTB 5805
9
Franchise Tax Board. Interest and Estimate Penalty Rates
10
Franchise Tax Board. 2025 Instructions for Form 5805F