Taxpayers who expect to owe California income tax that is not fully covered by withholding may need to make estimated tax payments throughout the year. Form 540-ES is used to calculate and print California estimated tax payment vouchers.
Program Entry
State → Edit California → Miscellaneous Forms → Estimated Payment Vouchers (Form 540-ES)
What Are Estimated Tax Payments?
Estimated tax payments are periodic payments made throughout the year toward your expected California income tax liability.
You may need to make estimated payments if you receive income that is not subject to withholding, such as:
- Self-employment income
- Contract or gig worker income
- Rental income
- Interest and dividends
- Capital gains
- Retirement income with little or no withholding
Making estimated tax payments can help avoid an underpayment penalty when you file your California return.
Who Should Consider Making Estimated Payments?
You may want to make estimated tax payments if:
- You expect to owe California tax when filing your return.
- Your withholding will not cover your expected tax liability.
- You have significant income that is not subject to withholding.
- You owed California tax when filing your prior year's return.
The program can help calculate recommended estimated payments based on information entered in your return.
How Are California Estimated Payments Scheduled?
California generally recommends that estimated payments be made according to the following schedule:
| Installment | Percentage of Annual Payment |
|---|---|
| 1st Installment | 30% |
| 2nd Installment | 40% |
| 3rd Installment | 0% |
| 4th Installment | 30% |
The program will calculate the payment amounts and generate the appropriate vouchers based on the information entered.
What Does Form 540-ES Provide?
The Form 540-ES section allows you to:
- Calculate estimated tax payments
- Generate payment vouchers
- Print vouchers for mailing
- Review recommended payment amounts for each installment period
What If My Income Changes During the Year?
Estimated payments are based on income expectations at the time the vouchers are prepared.
If your income increases or decreases significantly during the year, you may need to adjust future estimated tax payments to better match your actual tax liability.
Important Information
Form 540-ES is used to estimate future California tax payments and does not submit payments automatically.
Taxpayers are responsible for making any required payments by the applicable due dates. Failure to pay sufficient tax throughout the year may result in California assessing an underpayment penalty when the return is filed.