Home Office: Filing Ca Income Tax (2024)

If you're a California resident, part-year resident, or nonresident, you must file an income tax return if you receive income from a source in California, are required to file a federal return, or have income above a certain amount. You can file your California tax return electronically (e-file) through CalFile, which is a secure, accurate, fast, and easy option. Filing online is free, quick, and can get you the fastest refund possible through direct deposit. You can also file in-person at a location near you to get free help with preparing your state and federal tax returns. If you qualify for the California Earned Income Tax Credit (EITC), you can get up to $3,529. Additionally, if you worked from home, you may be able to claim deductions for home office expenses, which can reduce your overall income tax liability.

Home office expenses for employees

As an employee, you may be able to claim certain home office expenses, including work-space-in-the-home expenses, office supplies, and certain phone expenses. These deductions are claimed on your personal income tax return and reduce your overall income tax liability.

To claim home office expenses, you must meet the following criteria:

• Your employer required you to work from home (written or verbal agreement). For 2023, this includes employees who have voluntarily entered into a formal telework agreement with their employer.
• You worked from home in 2020, 2021, or 2022 due to the COVID-19 pandemic.
• You were required to pay for expenses related to your work space, but no deduction is allowed for expenses reimbursed by your employer.
• Your work space is where you mainly (more than 50% of the time) work for a period of at least four consecutive weeks in the year. If you have more than one eligible period during the year, you can claim your expenses for each period.
• You only use your work space to earn employment income, and you use it regularly and continually for in-person meetings with clients, customers, or other people while doing your work.
• Your expenses are used directly in your work.

If you meet the above criteria, you can claim your home office expenses using Form T777, Statement of Employment Expenses, and Form T2200, Declaration of Conditions of Employment. Form T2200 must be completed, reviewed, and signed by your employer. It is important to note that Form T2200 does not need to be submitted with your tax return but must be retained and provided if requested by the Canada Revenue Agency (CRA).

Eligible expenses for deduction include heat, electricity, light bulbs, cleaning materials, maintenance, and reasonable monthly home internet access fees. If you are renting your home, a reasonable portion of the rent may be deducted. However, mortgage interest and capital cost allowance (depreciation) may not be deducted.

Filing online

Filing your California income tax return online is a secure, accurate, fast, and easy option.

Firstly, you will need to create a MyFTB account to use CalFile and e-file your state tax return directly with the Franchise Tax Board. This is a free service that takes around 15 to 30 minutes to complete. The process is simple, with a step-by-step guide, and you can save and return at any time. You will need to have filed a CA tax return in the last 5 years to be eligible for a MyFTB account.

Once you have your account, you can log in and begin the process of filing your return. You will need to provide information on your income, deductions, and any applicable tax credits. If you have been working from home, you can claim deductions for home office expenses. This includes items such as office supplies and certain phone expenses. You will need to complete the relevant forms, such as Form T777 or Form T777S, and provide supporting documentation for your claims.

Who needs to file a CA income tax return

In California, you must file an income tax return if you are a resident, part-year resident, or nonresident and meet any of the following criteria:

• You are required to file a federal return
• You receive income from a source in California
• You have income above a certain amount

If you do not owe taxes or are not required to file, you may still be able to file a California tax return to get a refund. This applies if you had money withheld from your paycheck for state taxes or if you qualify for the California Earned Income Tax Credit (EITC).

For those who made less than the minimum filing requirement or had no income, California does not require an annual tax report. However, if you had state taxes withheld from your income, you will need to file a tax return to receive any refund due to you.

In terms of home office deductions, eligible employees who worked from home in 2020, 2021, or 2022 due to the COVID-19 pandemic can claim certain expenses related to the use of a workspace in their homes. This includes a portion of expenses such as utilities (electricity, heat, and water), home internet access fees, maintenance and minor repair costs, and rent paid for their residence.

Payment methods

California offers a variety of payment methods for your income tax return. You can pay online, through the mail, or in person at a field office.

Online Payments

To pay online, go to California Web Pay. You can pay using your checking or savings account. You will need your Social Security Number and last name to initiate an online payment. Individuals can pay tax bills, taxes from a current year's return, taxes from an amended return, estimated taxes, and taxes from group nonresident/composite returns.

Businesses can also pay their annual taxes or fees, bills or balances due, current or amended tax returns, and estimated taxes and extensions. Businesses should use the business payment option if they are a corporation, LLC, or partnership. Sole proprietors should pay as individuals. To pay business taxes online, you will need the entity type and ID number.

Payment by Mail

You can also mail a paper check or money order to the Franchise Tax Board. Make sure to include the tax year or tax period, along with your Social Security Number, Individual Tax ID number, or FTB ID number on the check. Mail individual tax payments to:

Franchise Tax Board

PO Box 942867

Sacramento, CA 94267-0001

And send business tax payments to:

Franchise Tax Board

PO Box 942857

Sacramento, CA 94257-0501

In-Person Payments

As of November 2022, you must make an appointment to pay your California taxes in person at a field office. You can find field offices in Los Angeles, Oakland, Sacramento, San Diego, and Santa Ana. You must use a check, money order, or credit card to pay in person. Cash payments are not accepted.

Payment Plans

If you cannot afford to pay your California state taxes in full, you can set up a payment plan. The set-up fee is $34 for individuals and $50 for businesses. Individuals can request a payment plan online or by mail. To apply by mail, fill out Form 3567 (Installment Agreement Request) and send it to:

Franchise Tax Board

PO Box 2952

Sacramento, CA 95812-2952

Or, you can call (800) 689-4776. To request a tax payment plan for a business, call (888) 635-0494. If you are out of state, use the following numbers:

• (916) 635-0494 for a corporation
• (916) 845-7166 for a limited liability company (LLC)
• (916) 845-7165 for a partnership

Credit Card Payments

You can pay your California taxes with a credit card online or over the phone. To pay online, go to ftb.ca.gov/pay and select "credit card" or navigate to the ACI Payments website. On the ACI Payments website, select California as your state and choose the type of tax you want to pay. Enter the payment amount, and the next page will display the total, including the processing fee. It costs 2.3% of your payment to pay with a credit card. Once you enter the payment amount, set up an online account to complete the process.

To pay by phone, call 800-272-9829 and follow the prompts.

Other Payment Options

Banks and corporations can use an electronic funds transfer to pay the following California taxes: bank and corporation tax, non-admitted insurance tax, real estate withholding, and resident/non-resident withholding. You must use EFT if your total tax due is over $80,000 or if you're making an estimated payment over $20,000.

Additionally, you can use tax prep software or hire a tax preparer who uses a program that allows electronic payments to pay with an electronic funds withdrawal (EFW).

Getting a refund

If you've paid too much tax, you may be able to get a refund. The amount of refund you can claim depends on several factors, including whether you qualify for the California Earned Income Tax Credit (EITC), whether you had money withheld from your paycheck for state taxes, and whether you have a home office.

California Earned Income Tax Credit (EITC)

If you qualify for the California Earned Income Tax Credit, you can get up to $3,529.

State Taxes

If you had money withheld from your paycheck for state taxes, you may be able to claim a refund.

Home Office Deduction

If you have a home office, you may be able to claim a tax deduction. To qualify for the home office deduction, you must meet one of the following criteria:

• Exclusive and regular use: You must use a portion of your home exclusively and regularly for your business. This includes structures on your property, such as an unattached studio, barn, greenhouse, or garage.
• Principal place of business: Your home office must be either the principal location of your business or a place where you regularly meet with customers or clients.

The home office deduction is valuable because it converts a portion of otherwise non-deductible expenses (e.g. utilities and homeowners insurance) into a deduction. The rate for the simplified square footage calculation is $5 per square foot, with a maximum of 300 square feet.

How to Get Your Refund

You can file your California tax return electronically (e-file) for free using CalFile or other authorized e-file providers. E-filing is a secure, accurate, fast, and easy option to file your tax return and get your refund. If you e-file, you can expect to receive your refund within up to 3 weeks. If you file a paper return, it can take up to 3 months to receive your refund.

Frequently asked questions