Yes. If you issued a Form 1099 to someone who lives in California or the income came from a California source, you generally need to get a copy to the Franchise Tax Board, but in most cases the IRS forwards it for you automatically and no separate California filing is required.1Franchise Tax Board. Guidance for Reporting Information Returns Whether you owe a direct submission to the FTB depends on how you filed with the IRS and whether your federal and state amounts match.
When a 1099 Has to Go to the FTB
California requires payers who file federal information returns to file copies with the FTB when either of two conditions is met:1Franchise Tax Board. Guidance for Reporting Information Returns
- The payee is a California resident or part-year resident.
- The income originated from within California, regardless of where the recipient lives.
The forms most people deal with are the 1099-NEC for nonemployee compensation and the 1099-MISC for payments like rents, royalties, and attorney fees. The requirement reaches further than that. Revenue and Taxation Code Section 18631 covers more than a dozen categories of federal information returns, including dividends, interest, broker transactions, mortgage interest, cancellation of debt, and retirement distributions.
When You Don’t Have to File Separately With California
The Combined Federal/State Filing Program (CFSF) is the shortcut. When you e-file your 1099s with the IRS using the CFSF guidelines in IRS Publication 1220, the IRS forwards the data to California automatically. If the amounts you reported to the IRS match the amounts for California, you do not need to file separately with the FTB at all.1Franchise Tax Board. Guidance for Reporting Information Returns
This is where many payers over-comply. If your payroll service or tax software already transmits through CFSF, California has your data. There is no second submission to make.
You do need to submit directly to the FTB if you file paper returns with the IRS, or if your California amounts differ from your federal amounts (because of withholding adjustments, for example).
How to File Directly With the FTB
For electronic submissions, the FTB uses its Secure Web Internet File Transfer (SWIFT) system, accessible by web browser or through SFTP protocols.2State of California Franchise Tax Board. Secure Web Internet File Transfer (SWIFT)
Paper returns go to:
Franchise Tax Board
PO Box 942840
Sacramento, CA 94240-60901Franchise Tax Board. Guidance for Reporting Information Returns
Watch the electronic filing threshold. The IRS now requires e-filing when you file 10 or more information returns in a calendar year, aggregated across nearly all return types.3Internal Revenue Service. Topic No. 801, Who Must File Information Returns Electronically A business filing six 1099-NECs and five 1099-MISCs crosses the line and must e-file all of them. Meeting that requirement through CFSF satisfies California at the same time.
The $2,000 Threshold Starting in 2026
For tax year 2026, the minimum reporting threshold for Form 1099-NEC and Form 1099-MISC rose from $600 to $2,000, and California follows the change. Beginning in 2027, the figure will adjust annually for inflation.4Internal Revenue Service. 2026 Publication 1099 You only need to issue and file these forms when you pay an individual or unincorporated entity $2,000 or more during the calendar year.5State of California Franchise Tax Board. 1099 Guidance for Recipients
The increase does not apply across the board. Forms like 1099-B (broker transactions), 1099-R (retirement distributions), and 1099-INT (interest income) keep their existing thresholds. California also maintains a separate $600 threshold for Form 1099-K payments to app-based drivers for third-party network transactions.1Franchise Tax Board. Guidance for Reporting Information Returns
So if you paid a freelance graphic designer $1,800 in 2026, you owe no 1099-NEC to the IRS and nothing to the FTB.
Deadlines
Form 1099-NEC is due to the FTB by January 31 of the year following payment, matching the federal deadline. For other information returns like Form 1099-MISC, the electronic filing deadline through CFSF is March 31.1Franchise Tax Board. Guidance for Reporting Information Returns
Penalties for Missing the Filing
California’s penalties for failing to file correct information returns follow the federal structure, with dollar amounts set under Revenue and Taxation Code Section 19183:6State of California Franchise Tax Board. FTB Pub. 1024 – Penalty Reference Chart
- $130 per return for failure to file a correct information return by the due date.
- $40 per return if you correct the return within 30 days of the due date.
- $80 per return if you correct it after 30 days but on or before August 1.
Annual caps limit total exposure. The maximum penalty is $2,010,000 per calendar year, reduced to $600,000 for businesses that averaged $5 million or less in gross receipts over the most recent three tax years.6State of California Franchise Tax Board. FTB Pub. 1024 – Penalty Reference Chart Reasonable cause relief is available on the federal standard, but not knowing about the filing requirement does not qualify.
Two Related Filings People Confuse With This
Sending the 1099 to the FTB is not the only California obligation that can arise from paying a contractor, and both of the following catch payers off guard because the thresholds don’t line up with the 1099 rules.
Nonresident Withholding
Paying a nonresident for services performed in California can require you to withhold 7% of the payment once total California-source payments to that payee exceed $1,500 in a calendar year.7State of California Franchise Tax Board. Withholding on Nonresidents Withholding is not required if payments stay at or below $1,500 for the year, if you are paying for goods rather than services, or if the services were performed entirely outside California. The payee can also reduce or eliminate the withholding by submitting Form 587 or applying for a waiver on Form 588.
Late Form 592 or Form 592-B filings carry their own penalty schedule: $60 per payee if 1 to 30 days late, $130 per payee at 31 days to 6 months, and $340 per payee beyond 6 months. Intentional disregard raises the penalty to $680 or 10% of the amount required to be reported, whichever is greater.7State of California Franchise Tax Board. Withholding on Nonresidents
EDD Independent Contractor Reporting
Businesses that hire independent contractors have a separate reporting duty to the Employment Development Department. It exists to help track parents who owe child support and has nothing to do with income tax.8Employment Development Department. Independent Contractor Reporting
You must file Form DE 542 within 20 calendar days when you pay an independent contractor $600 or more in a calendar year, or when you enter into a contract for $600 or more, whichever happens first.
Notice the gap. The EDD’s $600 trigger did not move when the 1099 threshold went to $2,000. You can pay a contractor $1,500 in 2026, owe the EDD a DE 542 within 20 days, and still owe no 1099-NEC. Most businesses are used to annual filing cycles, not 20-day ones, so a June hire means a June filing.