California state flag representing California one-time penalty abatement tax relief option available to state taxpayers.

A Clean Slate: California One-Time Penalty Abatement Program

Cassidy Jakovickas

May 15, 2024

After years of failed attempts to enact a first-time penalty abatement program, as a result of AB 194, which was signed into law last year, California has finally enacted a one-time late filing or late payment penalty abatement program for individual taxpayers.

California One-Time Penalty Abatement Vs. IRS Penalty Abatement Programs

Two primary differences distinguish California’s first-time penalty program from the IRS’ penalty abatement program. The first difference is that California relief is only available to individuals. It’s not available to business entities, including fiduciaries, trusts, or estates. 

The second difference is that California’s program is a one-time abatement program and is not available every four years like the IRS penalty abatement program. A legislative change is required to expand the program beyond individuals and or make it available more than once. 

When Can I Request A One-Time Penalty Abatement In California?

California’s one-time penalty abatement program is available for taxable years beginning on or after January 1st, 2022. However, taxpayers will not be able to take advantage of this new relief until after the 2022 tax year payment and filing deadlines have passed. For most taxpayers, this deadline will be October 16th, 2023 due to the available storm-related disaster postponements.

Who Can Request One-Time Penalty Abatement In California?

If you are located in any California county other than Lassen or Shasta counties, you will not be able to file for late payment or late filing penalty relief until after October 16, 2023, which is the postponement deadline related to the recently announced disaster relief. This means you won’t be liable for late filing or late payment penalties unless your return was filed, or payment was made, after October 16th, 2023. Penalties imposed for pre-2022 tax shares do not qualify for California’s new first-time penalty abatement program.

You can learn more about California’s one-time penalty abatement program on the Franchise Tax Board’s website here.