Filing Requirements for California Estate Tax Return

A California Estate Tax Return, Form ET-1, is required to be filed with the State Controller's Office, whenever a federal estate tax return Form-706 is filed with the Internal Revenue Service (IRS). However, after January 1, 2005, the IRS no longer allows the state death tax credit; therefore, a California Estate Tax Return is not required to be filed for decedents whose date of death is after December 31, 2004. (For information on the federal estate tax return filing requirements, you may view the IRS Instructions for Form 706.)

Pursuant to Revenue and Taxation Code section 13302 the amount of California estate tax is equal to the maximum allowable amount of the credit for state death taxes, allowable under the applicable federal estate tax law. Generally, this amount would be shown (depending on the year of death) on either line 13 or 15 of the Form-706.

The California Estate Tax Return must include a complete copy of the IRS Form 706 and all related schedules. The return should mailed to:

State Controller
Local Government Programs and Services Division / Tax Administration Section
P. O. Box 942850
Sacramento, CA 94250-5880

NOTE: The return should not be mailed to the Franchise Tax Board.

California estate taxes are due and payable by the estate's executor on or before nine months following the date of death. Checks shall be made payable to the State Treasurer and mailed to the State Controller's Office at the address listed above.

Pursuant to Revenue and Taxation Code section 13510, the penalty for failure to file a California Estate Tax Return is five percent (5%) per month or portion thereof, not to exceed 25%.

Effective January 1, 2001, the entire unpaid balance bears interest at the federal rate and is compounded daily. Pursuant to Revenue and Taxation Code section 13550, interest is calculated at the rate for underpayment of estate tax as provided in section 6621(a)(2) of the Internal Revenue Code. The federal rate is subject to change quarterly.

The State Controller's Office shall pay interest on any overpayment of tax, pursuant to Revenue and Taxation Code section 13563, in the same manner as provided in sections 6621(a)(1) and 6622 of the Internal Revenue Code.