If your California return results in a refund, you may choose to apply all or part of that refund to your 2026 California tax return instead of receiving the amount as a refund.
This option allows you to use your current-year overpayment as an estimated tax payment toward next year's California tax liability.
Program Entry
California Return → Payments → Apply Your State Refund to Your 2026 Tax Return
How Does the Refund Carryforward Work?
If you are entitled to a California refund, you may elect to:
- Receive the entire refund;
- Apply a portion of the refund to next year's taxes; or
- Apply the entire refund to next year's taxes.
The amount applied will be treated as an estimated tax payment for your 2026 California return.
Amount of State Refund That You Would Like to Apply to Your 2026 Return
Enter the amount of your California refund that you would like to carry forward to next year's return.
Important
Before entering an amount:
- Complete and save your California return.
- Review your final refund amount.
- Enter only the portion of the refund you want applied to next year.
If the amount entered is greater than the available refund, the amount will not transfer to the California return.
When Should I Return to This Section?
Because the refund amount is not finalized until the return is completed, you may need to return to the Payments section after completing your California return.
To revisit this entry:
State Return → Edit → Payments
Review the calculated refund and enter the amount you want applied to the next tax year.
What If I Owe California Tax?
If your California return shows a balance due, you cannot apply a refund to next year's return because no refund is available.
In this situation, any amount entered in the refund carryforward field will not transfer to the return.
Why Would I Apply My Refund to Next Year?
Some taxpayers choose to carry forward a refund when they:
- Expect to owe California tax next year.
- Make estimated tax payments each year.
- Have self-employment income.
- Receive investment or rental income with little or no withholding.
- Prefer to reduce future estimated tax payments.
How Does This Affect My Return?
Applying a refund to next year's return will:
- Reduce the refund issued for the current tax year.
- Create an estimated tax payment for the following tax year.
- Potentially reduce the amount owed when filing next year's California return.
Notes
- You must have a refund available before an amount can be applied to the next tax year.
- The amount entered cannot exceed the available refund.
- If the return has a balance due, no refund carryforward will be allowed.
- Refund carryforwards are treated as estimated tax payments for the following tax year.
- Consider reviewing your final California return before deciding how much of your refund to apply to next year's taxes.