California law requires business entities that prepare an original or amended return using tax preparation software to e-file returns. Failure to e-file will be penalized if the failure to e-file is due to willful neglect and not reasonable cause.

The penalty is $100 for the initial e-file failure and $500 for each subsequent failure. Business entities may annually request an e-filing waiver if they can show the inability to e-file is due to, but not limited to:

• Technology constraints
• Undue financial burden
• Other circumstances that constitute reasonable cause and not willful neglect.

You may submit a waiver to the state of California prior to, or up to 15 days, after filing the tax return. You may submit the Business Entity e-file Waiver Request Form via the California FTB Business entity e-file waiver request webpage.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.