California Estimated Tax Payments: Safe Harbors, Schedule, and Penalties

If you expect to owe California more than $500 in tax for 2026 after withholding and credits ($250 if you’re married or in a registered domestic partnership and filing separately), you need to send California estimated tax payments to the Franchise Tax Board during the year rather than waiting until you file.¹ California uses an uneven three-payment schedule—30% by April 15, 40% by June 15, nothing in September, and the final 30% by January 15 of the following year—so 70% of what you owe is due before summer ends.² Miss an installment and the FTB assesses a penalty for that period even if you catch up later.

Who Has to Pay

Two conditions have to both be true. You expect to owe at least $500 in California tax for the year ($250 if married or RDP filing separately) after subtracting withholding and credits, and your withholding plus credits will fall short of the smaller of 90% of your 2026 tax or 100% of your 2025 tax (including any Alternative Minimum Tax).¹

In practice, this catches independent contractors, freelancers, landlords, and people with substantial interest, dividend, or capital gains income. If a California employer withholds tax from every paycheck and you have little income on the side, you’re usually covered without doing anything.

One exemption to know: if you’re a nonresident or a brand-new California resident in 2026 and you had no California tax liability in 2025, you owe no estimated payments for 2026.³

How Much to Pay: The Safe Harbors

A “safe harbor” is a calculation that shields you from the underpayment penalty even if your actual tax turns out higher than expected. Which one you use depends on your income.

Standard Rule

Most people can pay the lesser of 90% of their 2026 tax or 100% of their 2025 tax (including AMT). Paying last year’s tax, split across the installments below, is the simpler path because it doesn’t require you to forecast this year’s income.¹

Higher Earners

If your 2025 California AGI was over $150,000 ($75,000 if married/RDP filing separately), the prior-year safe harbor is 110% of your 2025 tax rather than 100%. You can still use the 90%-of-current-year figure if it’s smaller.²

$1 Million and Above

Once your 2026 California AGI hits $1,000,000 ($500,000 if married/RDP filing separately), the prior-year safe harbor disappears. You have to base payments on 90% of your actual 2026 tax.²

Taxpayers with taxable income above $1,000,000 also owe an additional 1% Behavioral Health Services Tax (formerly the Mental Health Services Tax), and that surcharge has to be built into your estimated payments. The 540-ES instructions include a separate worksheet for it.¹

The Payment Schedule

California’s schedule is where people used to the federal system get caught out. Federal estimated tax is four equal 25% installments. California technically has four periods too, but the third one requires 0%, so you make three actual payments on an uneven split:²

30% by April 15, 2026
40% by June 15, 2026
0% on September 15, 2026 (no payment required)
30% by January 15, 2027

When a due date falls on a weekend or legal holiday, it slides to the next business day. Because 70% is owed by mid-June, waiting until fall to start thinking about estimated tax often means you’re already accruing penalties on the first two installments.

Skipping the January Payment

You can drop the January 15 installment if you file your 2026 return and pay the entire balance by January 31, 2027. The FTB will not assess a fourth-installment penalty in that case.³

Farmers and Fishermen

If at least two-thirds of your 2025 or 2026 gross income comes from farming or fishing, the schedule collapses. You can pay the entire estimated tax in one payment by January 15, 2027, or skip estimated payments altogether by filing your 2026 return and paying in full by March 1, 2027. The 110% higher-income safe harbor does not apply if you qualify under this test.¹

Fiscal-Year Filers

Fiscal-year taxpayers shift each deadline to the 15th day of the 4th, 6th, and 9th months of their fiscal year, plus the 1st month of the following fiscal year.²

How to Send the Money

FTB Web Pay draws directly from a checking or savings account at no cost, and a MyFTB account lets you schedule all three payments in advance.⁴ Credit card payments go through ACI Payments and carry a 2.3% service fee, which on a $5,000 payment works out to $115.⁵ You can also mail a check or money order payable to “Franchise Tax Board” with the voucher from Form 540-ES; include your SSN or ITIN, the tax year, and the form number.

Electronic payment becomes mandatory once any single estimated tax or extension payment exceeds $20,000, or once your most recent original return showed a liability over $80,000. Mailing a check after you’ve crossed either threshold can trigger a separate penalty.⁶

When Your Income Is Uneven

If your income lands mostly in one part of the year, the standard schedule can force early payments on money you haven’t earned. The annualized income installment method recalculates each installment based on income actually received through that period. You file Form FTB 5805 with the annualization schedules attached to your return, and the form applies the smaller of the annualized or regular installment for each period.⁷ Electing this method for any period commits you to using it for every period that year.

What Happens If You Underpay

The FTB calculates the underpayment penalty separately for each due date on Form FTB 5805, so an extra December payment does not undo a missed April installment.⁸ For the first half of 2026, the estimated tax penalty rate is 4%, applied to the underpaid amount for each period it remains unpaid.⁹ The FTB usually figures the penalty and bills you after you file, unless you’re using the annualized method or requesting a waiver.

A waiver is available in limited situations: the underpayment resulted from a casualty, disaster, or other unusual circumstance where the penalty would be unfair, or you retired after age 62 or became disabled during the tax year and the shortfall was due to reasonable cause. You request a waiver by attaching Form FTB 5805 to your return.⁸ The more reliable path is to hit a safe harbor in the first place.

Nonresidents and Part-Year Residents

Living outside California doesn’t excuse you from estimated payments if you have California-source income. That includes compensation for work performed in California, rent from California real property, gain on California real estate, and income from a California-based business.¹⁰ The same $500/$250 threshold and safe harbor rules apply. Part-year residents owe on everything received while a resident plus California-source income received while a nonresident.

If You Started Joint and Switch to Separate

When spouses or RDPs make joint estimated payments during the year and then choose to file separately, either can claim the full amount, or you can split it. Notify the FTB of how to divide the credit before you file so it lands on the right account.¹ Skip that step and the payment can post entirely to one spouse, leaving the other with an underpayment penalty.

1
Franchise Tax Board. 2026 Instructions for Form 540-ES Estimated Tax for Individuals
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Franchise Tax Board. Estimated Tax Payments
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Franchise Tax Board. 2025 Instructions for Form 540-ES Estimated Tax for Individuals
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Franchise Tax Board. Pay by Bank Account (Web Pay)
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Franchise Tax Board. Pay by Credit Card
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Franchise Tax Board. Mandatory e-Pay for Individuals
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Franchise Tax Board. 2024 Instructions for Form FTB 5805 Underpayment of Estimated Tax by Individuals and Fiduciaries
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Franchise Tax Board. 2025 Instructions for Form FTB 5805 Underpayment of Estimated Tax by Individuals and Fiduciaries
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Franchise Tax Board. Interest and Estimate Penalty Rates
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Franchise Tax Board. Part-Year Resident and Nonresident