Screen CABank - California Direct Deposit, Electronic Funds Withdrawal (1040)

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See also: 1040 California frequently asked questions

Overview

Use this screen to enter direct deposit and electronic funds withdrawal information for the tax return, as well as electronic funds withdrawal for estimated payments and for Form 3567, Installment Agreement Request. Direct deposit is available when filing electronically or on paper. Electronic funds withdrawal is available only when filing electronically. The taxing agency does not support electronic funds withdrawal for extensions.

Once an electronic return is transmitted, a direct deposit or electronic funds withdrawal request cannot be added, modified or canceled. The routing transit number and account number should be verified annually.

Returns with a balance due and Form 3567 installments payments use only the Primary account fields for direct debit of payments. Returns with a refund may be direct deposited in one or two banks, allocated either by percentage or actual amount. The total direct deposit must equal the total refund, and all bank information must be valid. Failure to enter complete and valid information will result in a paper check issued by the state for the total refund amount.

This screen is not used for Form 568, Limited Liability Company Return of Income returns. Use Screen CALLCBnk for electronic filing and bank information related to Form 568.

Direct Deposit and Electronic Funds Withdrawal

Use this section to indicate the California option for direct deposit and electronic funds withdrawal (direct debit). Direct deposit is available when filing electronically or on paper. Form 540/540NR shows details of the requested deposit. Electronic funds withdrawal for the return is available only when filing electronically. Form 8453 or Form 8455 shows the details of requested withdrawal.

Suppress direct deposit of California refund

UltraTax CS automatically chooses direct deposit for the California return refund when account information is entered. Enter X if you do not want to deposit the state refund directly into the client’s account.

Use Refund Advantage / EPS Financial for refund deposit

Use this field to have the client’s refund deposited with Refund Advantage / EPS Financial. This field is available only when filing electronically and a bank product is selected in federal Screen RAL.

Enable electronic funds withdrawal for a balance due return

This field requests EFW for balance due on Form 540/540NR e-filed return. This field does not effect the extension payment.

Date of withdrawal

If filing on or before the original due date, the date of withdrawal defaults to the original due date. Use this field to request an earlier withdrawal date. If filing after the original due date, enter the anticipated filing date of the return. The taxing agency will initiate a withdrawal request when the return has completed processing.

The actual transfer of funds may occur on or after the requested date. Delays of several days are not uncommon.

Amount of withdrawal

The amount of withdrawal defaults to the total amount due with the return. Use this field to request a different amount.

Estimated Payment - Electronic Funds Withdrawal

California Franchise Tax Board supports electronic funds withdrawal (direct debit) of estimated payments with the Form 540/540NR electronically filed tax return or as standalone payments via the electronic Extension process. If not filing the current year return before next year’s estimates are due, use File > Print Extensions to submit estimated payments via EFW.

Use this section to designate electronic funds withdrawal for next year’s estimated tax payments. Electronic funds withdrawal is available only when filing the return electronically or using the extension payment process (File > Print Extensions) to submit electronically. Note that it is not necessary to actually include an extension payment amount when using File > Print Extensions to authorize direct debit of next year’s estimates as standalone payments.

Enter code 1 to authorize EFW of next year’s estimate payments with the Form 540/540NR return. Enter code 2 to authorize EFW via the Extension process. It is not necessary to actually make an extension payment in order to authorize direct debit of estimated payments when using File > Print Extensions.

You must include the Requested Withdrawal Date in order to authorize EFW. UltraTax CS automatically enters the default due date for the quarterly estimate when you authorize EFW of the payment. Dates for electronic withdrawal may be adjusted by using the Requested Withdrawal Date fields.

The estimated payment amount is calculated via the California Estimated Tax Payment Worksheet.

The dates and amounts of withdrawal are included (as applicable) on Form 8453, Form 8455, Form 8453(PMT), Form 8879(PMT), the California Estimated Tax Payments Worksheet, the filing instructions, and in the electronic file.

Regardless of the date the payment is actually processed by California Franchise Tax board, the payment is considered timely if the electronic record is submitted by the due date and subsequently accepted by FTB and the requested payment date falls on or before the due date. Even if a due date for a quarterly estimated tax payment has passed, FTB will process the electronic record and related payment as long as the Requested Withdrawal Date does not fall after the 4th quarter estimate due date. However, FTB recommends filing the electronic return or electronic payments in advance of the standard due date in order to minimize the risk of filing late in the case of a rejected e-file that cannot be resubmitted until after the due date.

UltraTax CS uses standard due dates for California estimated payments that are not designated for electronic funds withdrawal.

Extension Payment - Electronic Funds Withdrawal

Use this section to enable electronic funds withdrawal of the extension payment and to enter a date of withdrawal other than 4/17/18. For complete information on conditions and data entry required to generate the electronic record for electronic funds withdrawal of the extension payment, see 1040-CA: Extension Payment - Electronic Funds Withdrawal.

Primary Account for Deposit and Withdrawal

Enter Primary account information for refund, balance due with electronically filed return, or balance due for electronic funds withdrawal of extension payment.

The primary account information entered in federal Screen Bank transfers automatically. A different account may be entered for the California return. California Franchise Tax board requires the routing transit number and account number to be verified annually with the taxpayer for electronically filed returns.

To prevent unintended IRA premature withdrawal penalties or excess contributions, account information does not transfer from federal Screen Bank for an IRA. If a deposit to an IRA is intended, enter that account information in this screen. An IRA cannot be selected for electronic funds withdrawal.

Use either the Dollar amount method or the Percent method to allocate a direct deposit to more than one bank. Do not use more than one method. Dollar amounts are used if entered. Percent fields are only used when the Dollar amount fields for Primary account and Secondary account are both blank. When the refund is allocated between two or more banks in the federal screen, the Percent allocated for the Primary account and Secondary account #1 transfer to this screen as a default. Use the State if Different Percent fields for the Primary account and the Secondary account to allocate between the two banks differently for the state refund. Amounts allocated in the federal screen do not transfer to this screen. Enter either dollar amounts that equal the total state refund or percent allocations that total 100 percent between the two banks (Primary and Secondary). When the Dollar amount and Percent fields are blank, the entire refund is applied to the Primary account. Failure to include 100 percent of the refund amount in the direct deposit request results in a paper check issued by the state for the total amount of refund.

Once an entry is made in the Method taxpayer used to verify bank information field, the remaining fields in this section are non-enterable. If a change is necessary for bank information, remove data entry from the Method taxpayer used to verify bank information field in order to enter data in the other fields.

Method taxpayer used to verify bank information

Use this field to indicate the method by which the taxpayer has verified that the bank information entered on this screen is accurate. Based on the time that data is entered in this field or transferred to this field, UltraTax CS includes a time-stamp in the electronic record to indicate the time the preparer acknowledged that the taxpayer has verified bank account information.

If not entered manually, data entry in this field transfers from federal Screen Bank. When there is data entry in this field, the fields for primary bank account information and secondary bank account information are non-enterable. If a change is necessary for bank account information, remove data entry from this field in order to enter data in the other fields for bank information. Upon entering or changing the bank account information on this screen, enter the proper code to indicate the method by which the taxpayer verified the bank account information to be used for California purposes.

IRS Security Summit Guidelines require verification of bank account information annually. California Franchise Tax Board follows certain elements of these guidelines. UltraTax CS displays a critical diagnostic message when this field is blank and any bank account information is entered on this screen. For electronically filed returns requesting direct deposit of refund, the UltraTax CS displays e-file error messages when creating the electronic record if this field is blank. For paper-filed returns requesting direct deposit of refund, UltraTax CS omits bank account information from Form 540/540NR if this field is blank.

Note: California Franchise Tax Board does not require verification of bank account information for electronically filed returns requesting direct debit of balance due, direct debit of estimate payment, or direct debit of extension payment. However, IRS Security Summit Guidelines require such verification annually. Thus, UltraTax CS displays a critical diagnostic if the bank information entered on Screen CABank has not been verified, regardless of whether a direct deposit or direct debit is being requested (or not requested). However, UltraTax CS does not prevent creation of the electronic record if direct debit of a payment is requested but this field is blank.

Primary account: Routing transit number

Data entry in this field is required in order to consider the account information complete for UltraTax/1040 processing. If this field is left blank, the account will not be used. The routing transit number must be nine digits with the first two digits within the range of 01-12 or 21-32.

Primary account: Name of financial institution

This field is used in filing instructions and forms to help identify the account.

Primary account: Depositor account number

Data entry in this field is required in order to consider the account information complete for UltraTax/1040 processing. If this field is left blank, the account will not be used. The account number may include digits and letters. Omit spaces, hyphens, and other special characters.

Primary account: Type of Account

Data entry in this field is required in order to consider the account information complete for UltraTax/1040 processing. If this field is left blank, the account will not be used. Select the type of account from the drop-down list.

An IRA account type cannot be selected for electronic funds withdrawal.

Primary account: Non-US financial institution

There are regulations affecting international electronic funds transfers processed though the automated clearing house (ACH) network. A domestic ACH transaction is a direct deposit to or withdrawal from an account in a U.S. financial institution. An international ACH transaction (IAT) is a direct deposit to an account in a U.S. bank that automatically forwards the refund to an account in a foreign financial institution, or a withdrawal from a U.S. bank account that receives the funds for that transaction from a foreign account. The account owner will know when an international transfer account has been established for them. Enter X if the account identified is used for an IAT. Because state agencies cannot process an IAT, UltraTax CS suppresses the direct deposit or electronic funds withdrawal when this field is marked. This suppression is noted in the diagnostic messages and the account information is omitted from forms, client documents, and electronic returns. State agencies are tallying how many international transactions they will need to support in future years so the return will indicate that an IAT was requested.

Secondary Account for Deposit

The secondary account information entered in federal Screen Bank transfers automatically. A different account may be entered for the California return. When using a secondary account, the California Franchise Tax board requires the routing transit number and account number to be verified annually with the taxpayer for electronically filed returns.

To prevent unintended IRA premature withdrawal penalties or excess contributions, account information does not transfer from federal Screen Bank for an IRA. If a deposit to an IRA is intended, enter that account information in this screen. An IRA cannot be selected for electronic funds withdrawal.

Use either the Dollar amount method or the Percent method to allocate a direct deposit to more than one bank. Do not use more than one method. Dollar amounts are used if entered. Percent fields are only used when the Dollar amount fields for Primary account and Secondary account are both blank. When the refund is allocated between two or more banks in the federal screen, the Percent allocated for the Primary account and Secondary account #1 transfer to this screen as a default. Use the State if Different Percent fields for the Primary account and the Secondary account to allocate between the two banks differently for the state refund. Amounts allocated in the federal screen do not transfer to this screen. Enter either dollar amounts that equal the total state refund or percent allocations that total 100 percent between the two banks (Primary and Secondary). When the Dollar amount and Percent fields are blank, the entire refund is applied to the Primary account. Failure to include 100 percent of the refund amount in the direct deposit request results in a paper check issued by the state for the total amount of refund.

Once an entry is made in the Method taxpayer used to verify bank information field, the fields in this section are non-enterable. If a change is necessary for bank information, remove data entry from the Method taxpayer used to verify bank information field in order to enter data in this section.

Secondary account: Routing transit number

Data entry in this field is required in order to consider the account information complete for UltraTax/1040 processing. If this field is left blank, the account will not be used. The routing transit number must be nine digits with the first two digits within the range of 01-12 or 21-32.

Secondary account: Name of financial institution

This field is used in filing instructions and forms to help identify the account.

Secondary account: Depositor account number

Data entry in this field is required in order to consider the account information complete for UltraTax/1040 processing. If this field is left blank, the account will not be used. The account number may include digits and letters. Omit spaces, hyphens, and other special characters.

Secondary account: Type of Account

Data entry in this field is required in order to consider the account information complete for UltraTax/1040 processing. If this field is left blank, the account will not be used. Select the type of account from the drop-down list.

An IRA account type cannot be selected for electronic funds withdrawal.

Secondary account: Non-US financial institution

There are regulations affecting international electronic funds transfers processed though the automated clearing house (ACH) network. A domestic ACH transaction is a direct deposit to or withdrawal from an account in a U.S. financial institution. An international ACH transaction (IAT) is a direct deposit to an account in a U.S. bank that automatically forwards the refund to an account in a foreign financial institution, or a withdrawal from a U.S. bank account that receives the funds for that transaction from a foreign account. The account owner will know when an international transfer account has been established for them. Enter X if the account identified is used for an IAT. Because state agencies cannot process an IAT, UltraTax CS suppresses the direct deposit or electronic funds withdrawal when this field is marked. This suppression is noted in the diagnostic messages and the account information is omitted from forms, client documents, and electronic returns. State agencies are tallying how many international transactions they will need to support in future years so the return will indicate that an IAT was requested.

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