The annual income tax deadline is a stressful time for most taxpayers. Completing a standard California personal income tax return, Form 540, requires answering 68 questions and performing many computations, so it can be easy to forget to also include the required supporting documents, such as the state copy of your W-2. Fortunately, there is a simple solution if you forget to attach your W-2 to your California income tax return.
E-filing a California State Income Tax Return
If you are a California resident and e-file your California tax return, you are not required to send a paper copy of your W-2. You are required to submit the information printed on your W-2 electronically as part of the e-filing process. This information includes the employer's name, address and the employer's California Employer Identification Number, or EIN, in box 19 of the W-2, as well as state disability insurance withholding in box 14, the state wages in box 16, state income tax withholding in box 17, and any local taxes withheld and the taxing locality in boxes 19 and 20. If any of the required information is missing, the e-filed state return will be rejected. The Franchise Tax Board compares this electronic information with information reported by the employer on his state employer tax forms.
Why Does California Require a Copy of Your W-2?
Unlike the federal government, the state does not receive a copy of your W-2 from your employer. Instead, the California Employment Development Department, or EDD, receives quarterly state payroll tax reports from the employer and an annual reconciliation form that summarizes the quarterly reports; the EDD passes this information along to the Franchise Tax Board, or FTB. If you file a paper copy of your California tax return, there is no place on the form to enter the required W-2 information that identifies your employer, such as the state EIN, and the state copy of your W-2 allows the FTB to match the information with the employer's reports.
Form 540 With No W-2
If you forget to attached the required state copy of your W-2 to your paper-filed California resident tax return, Form 540, 540A or 540EZ, wait for the FTB to contact you and request the form. Send the W-2 with a copy of the notice you receive. Do not send the W-2 alone, an amended return or another copy of the original return with the W-2 attached. Failing to attach the form when you originally file will delay the processing of your tax return, but there is no penalty for this error. There may be additional penalties and interest on any unpaid taxes, and it will also delay any refund due to you.
Form 540 NR With No W-2
If you are not a California resident but have California W-2 income, you are required to file Form 540 NR (non-resident), with the state copy of the W-2 attached. If you forget the W-2, the same procedure applies: Wait until the FTB contacts you and send the W-2 back with a copy of the notice. The FTB does not offer a free e-file option to non-residents.