California Form FTB 3805P is the Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts form that California taxpayers file with their state return when they take an early or non-qualified distribution from a retirement account, education savings account, ABLE account, Archer MSA, or Medicare Advantage MSA. The form applies California’s 2.5% additional state tax (and a 6% rate for SIMPLE IRA early distributions, plus 12.5% for some MSA distributions) on top of the federal 10% penalty already calculated on federal Form 5329.
If you skip this form when you owe it, the Franchise Tax Board will assess the additional tax, plus interest and a late-payment penalty, often years after you file. According to FTB processing data, early-distribution mismatches between federal Form 5329 and California Form 3805P are among the top 10 reasons California personal income tax returns receive a Notice of Proposed Assessment, and the average bill exceeds $1,200 once interest is added.
Here is what you will learn in this guide:
- 📋 What FTB 3805P is, who must file it, and how it differs from federal Form 5329
- 🔢 A line-by-line walkthrough of every box on the 2025 revision of the form
- 👥 Three real filer scenarios (early 401(k) withdrawal, Coverdell ESA misuse, SIMPLE IRA early distribution)
- ⚠️ The 10 most common mistakes that trigger FTB notices and how to dodge each one
- ✅ A pre-filing checklist, filing instructions for every channel, and 12 field-level FAQs
What the Form Is and Who Must File It
California Form 3805P is California’s parallel to federal Form 5329. The Franchise Tax Board uses it to collect the state’s own additional tax on early or non-qualified distributions from tax-favored accounts. The current revision is the 2025 Form FTB 3805P, released by the FTB for the 2025 tax year and filed with your 2025 California return in 2026.
You must file Form 3805P if any of the following are true for the tax year. You took a distribution from a qualified retirement plan, IRA, annuity, or modified endowment contract before age 59½ and no exception applies. You took a non-qualified distribution from a Coverdell ESA, a 529 qualified tuition program, or an ABLE account that was not used for qualified expenses. You received a taxable distribution from an Archer MSA or Medicare Advantage MSA reported on federal Form 8853. You rolled an IRA into an HSA — California does not conform to the federal IRA-to-HSA rollover, so the entire distribution is taxable in California and subject to the 2.5% additional tax.
The form is filed by the account owner, not the plan administrator. If both spouses on a joint return took early distributions, each spouse files a separate Form 3805P, and the totals are combined on Form 540 or 540NR. Trustees and beneficiaries of inherited accounts can also be required to file, depending on the type of distribution and the age of the original owner.
California’s additional tax is authorized by Revenue and Taxation Code Section 17085, which conforms California to most — but not all — of the federal exception list under IRC Section 72(t). Where California does not conform (IRA-to-HSA rollovers, qualified recovery assistance distributions, and certain disaster-related withdrawals), the FTB requires the additional tax even when the IRS waived it.
Before You Start: Documents and Information You Need
Gather every document below before you open the PDF or your tax software. Missing even one item can cause a math error, a mismatch with your federal return, or an FTB notice months later.
- Federal Form 1099-R for every retirement distribution. This shows the gross distribution, taxable amount, and the IRS distribution code in Box 7. The code drives whether you owe the 2.5% additional California tax.
- Federal Form 5329 (already completed). The numbers on Part I, Part II, and Part V of federal Form 5329 feed directly into Parts I, II, and III of California Form 3805P. File 5329 first, then 3805P.
- Federal Form 1099-Q for ESA or 529 distributions. This shows distributions from Coverdell ESAs and qualified tuition programs that may flow to Part II of Form 3805P.
- Federal Form 1099-QA for ABLE account distributions. ABLE distributions go on the same Part II line as ESA and QTP distributions.
- Federal Form 8853 for Archer MSA or Medicare Advantage MSA distributions. The taxable distribution amount from line 8 of Form 8853 transfers to line 9 of Form 3805P.
- Records of qualified education expenses. Tuition statements (Form 1098-T), receipts for books and required supplies, and room-and-board records prove which Coverdell or 529 dollars were qualified.
- Your date of birth and the distribution date. California uses these to confirm whether you were under 59½ on the date of the distribution.
- Documentation for any exception you claim. Examples include a separation-from-service letter for the Rule of 55, medical bills for the medical-expense exception, or proof of total and permanent disability.
- Last year’s California return. You may need carryover information for ABLE accounts or to confirm the basis in a Roth IRA.
- Your California Form 540 or 540NR draft. The additional tax from Form 3805P flows to line 63 of Form 540 or line 73 of Form 540NR.
Where to Get the Form and How to Access It
The official, current version of Form 3805P is hosted on the FTB’s forms library. Download the 2025 PDF of Form FTB 3805P and the 2025 Instructions for Form FTB 3805P. Both documents are free, fillable, and printable.
Tax software users will find the form already built in. TurboTax, H&R Block, FreeTaxUSA, Drake, and Lacerte all generate Form 3805P automatically when you enter a Form 1099-R with an early-distribution code, but you should still review the form before e-filing because the software may misclassify rollovers and exceptions.
CalFile, the FTB’s free e-file portal, supports Form 3805P for most simple returns. If you are filing on paper, print the form on white 8.5-by-11-inch paper, single-sided, and attach it behind your Form 540 in the order listed in the 2025 Personal Income Tax Booklet.
Always confirm the revision date in the upper-right corner of the form matches the tax year you are filing. Submitting a 2024 form for a 2025 return triggers an automatic FTB rejection and a 60-day delay while the form is corrected.
Step-by-Step: How to Fill Out FTB 3805P Line by Line
Form 3805P has a header section followed by three numbered parts. Complete only the parts that apply to your situation, but do not skip the header on any return.
Header: Name and SSN
The header asks for your first name, middle initial, last name, and Social Security Number. If you are filing jointly and both spouses owe the additional tax, each spouse fills out a separate Form 3805P with their own name and SSN at the top.
To answer it, print or type your name exactly as it appears on your California Form 540, in CAPITAL LETTERS, and enter your nine-digit SSN with no dashes. Maria Lopez writes MARIA LOPEZ and 123456789 in the header boxes.
A common nuance involves name changes after marriage or divorce. If your Social Security card still shows your maiden name but your Form 540 shows your married name, use the name on the Social Security card to avoid a name-control mismatch with the IRS data-share file the FTB uses.
The most frequent mistake here is entering a spouse’s SSN on the wrong form. The consequence is that the additional tax gets credited to the wrong spouse’s account, and the FTB issues a Notice of Proposed Assessment to the spouse who actually owes it.
A widespread misconception is that the header SSN must match the SSN on the 1099-R. It must match the SSN of the person who took the distribution, which is almost always the same as the 1099-R recipient SSN, but inherited-IRA distributions are an exception worth verifying.
Part I, Line 1 – Early Distributions Included in Income
Line 1 asks for the total amount of early distributions from qualified retirement plans (including IRAs) that you included in income on your federal return. Pull this number directly from line 1 of your federal Form 5329, Part I.
To answer it, enter the dollar amount with no cents, no commas, and no dollar sign. Carlos Nguyen, age 42, took a $20,000 hardship distribution from his 401(k); he writes 20000 on line 1. For Roth IRA distributions, only the taxable portion (the earnings, not your contributions) goes on line 1.
A frequent edge case involves partial rollovers. If you received a 1099-R for $50,000 but rolled $30,000 back into another IRA within 60 days, only $20,000 belongs on line 1. The rolled-over portion is excluded.
The most common mistake is double-counting a distribution that was already partially rolled over. The consequence is paying 2.5% on money you never actually pocketed, often hundreds of extra dollars in state tax.
A widespread misconception is that loans from a 401(k) belong on line 1. They do not, unless the loan went into default and was reported as a deemed distribution on Form 1099-R with code L.
Part I, Line 2 – Distributions Not Subject to Additional Tax
Line 2 asks for the portion of line 1 that qualifies for an exception under IRC Section 72(t) as conformed by California. You must also write the two-digit exception number from the instructions in the small box.
To answer it, enter the exempt dollar amount and the exception code from the FTB 3805P instructions. Janet Park, age 56, separated from service from her employer’s 401(k) in the year she turned 55; she enters 15000 on line 2 and exception code 01 in the box.
A nuance every filer should understand is that California does not conform to every federal exception. The IRA-to-HSA rollover exception (federal code 09) is denied by California, so even though it appears on Form 5329, it cannot reduce the line 1 amount on Form 3805P.
A common mistake is using the federal exception number when California uses a different one. The consequence is that the FTB rejects the exception and assesses 2.5% on the full line 1 amount, plus interest.
A misconception worth correcting is that the “Rule of 55” applies to IRAs. It does not, at the federal or state level — it applies only to qualified employer plans like 401(k)s and 403(b)s where the employee separates from service in or after the year they turn 55.
Part I, Line 3 – Amount Subject to Additional Tax
Line 3 is a math line. Subtract line 2 from line 1 and enter the result.
To answer it, do the subtraction and write the answer with no cents. If Carlos had no exceptions, his line 3 reads 20000. If line 2 equals or exceeds line 1, enter zero.
A nuance is that line 3 cannot be negative. If your exception amount is larger than the early distribution, enter 0 and double-check your line 1 entry.
The most common mistake is transcribing line 1 onto line 3 without subtracting line 2. The consequence is overpaying the additional tax by the full exception amount times 2.5%.
A misconception is that line 3 should match line 4 of Form 5329. The two are independent calculations because California does not always conform to federal exceptions.
Part I, Line 4 – Tax Due on Early Distributions
Line 4 multiplies line 3 by 2.5% (.025), unless any portion came from a SIMPLE IRA within the first two years of participation, in which case that portion is multiplied by 6% (.06).
To answer it, do the multiplication and round to the nearest dollar. Carlos multiplies 20000 × 0.025 = 500 and writes 500 on line 4. He then carries 500 to Form 540, line 63, with “FTB 3805P” written to the left of the amount.
A nuance applies to mixed distributions: if $5,000 of a $20,000 distribution came from a SIMPLE IRA in year one of participation, you compute (5000 × 0.06) + (15000 × 0.025) = 300 + 375 = 675.
The most common mistake is using the federal 10% rate. The consequence is overstating the tax fourfold and overpaying California by hundreds or thousands of dollars.
A misconception is that line 4 replaces the federal 10% penalty. It does not — the federal penalty is paid to the IRS via Form 5329, and the California 2.5% is paid separately to the FTB via Form 3805P.
Part II, Line 5 – Distributions from ESAs, QTPs, or ABLE Accounts
Line 5 asks for the amount included in income on Schedule CA from a Coverdell ESA, a 529 qualified tuition program, or an ABLE account.
To answer it, transfer the taxable distribution amount from your federal worksheet for Form 1099-Q or Form 1099-QA. Aisha Brooks withdrew $4,000 from her son’s 529 to pay for a family vacation; the full $4,000 was non-qualified, so she enters 4000 on line 5.
A nuance involves scholarships. If the beneficiary received a tax-free scholarship, the equivalent amount of 529 distribution is taxable but not subject to the additional tax — list it on line 5 and again on line 6 to back it out.
The most common mistake is including qualified distributions on line 5. The consequence is paying the 2.5% additional tax on money used for legitimate tuition or room and board.
A misconception is that K-12 tuition is always a qualified 529 expense in California. It is not — California does not conform to federal K-12 529 rules, so up to $10,000 of federal-qualified K-12 tuition is non-qualified for California and goes on line 5.
Part II, Line 6 – ESA, QTP, or ABLE Distributions Not Subject to Additional Tax
Line 6 captures the portion of line 5 that qualifies for an exception, such as the death or disability of the beneficiary, scholarship offsets, or attendance at a U.S. military academy.
To answer it, enter the dollar amount that meets one of the exceptions listed in the FTB 3805P instructions. If Aisha’s son had received a $1,500 scholarship, she would enter 1500 on line 6.
A nuance is that the ABLE account “rollover to another ABLE account” exception requires the rollover to occur within 60 days and to a qualified ABLE account for the same beneficiary or an eligible family member.
The most common mistake is claiming a scholarship exception without keeping the scholarship award letter. The consequence is denial of the exception during an FTB audit and a bill for the additional tax plus interest.
A misconception is that any distribution used for “education” is exempt. Only specific qualified higher-education expenses listed in IRC Section 529(e)(3) qualify, and personal living expenses unrelated to enrollment do not.
Part II, Line 7 – Amount Subject to Additional Tax
Line 7 subtracts line 6 from line 5.
To answer it, do the subtraction. Aisha subtracts 0 from 4000 and writes 4000 on line 7.
A nuance is that, like Part I, line 7 cannot be negative — enter zero if line 6 exceeds line 5.
The most common mistake is leaving line 7 blank when line 5 has an entry. The consequence is FTB recalculation and a notice for the missing tax.
A misconception is that line 7 automatically equals line 5. It only does so when no exception applies.
Part II, Line 8 – Tax Due on ESA/QTP/ABLE Distributions
Line 8 multiplies line 7 by 2.5% (.025) and carries the result to Form 540, line 63 or Form 540NR, line 73.
To answer it, multiply and round. Aisha computes 4000 × 0.025 = 100 and writes 100 on line 8.
A nuance is that the 2.5% rate applies regardless of which type of account (ESA, QTP, or ABLE) generated the distribution.
The most common mistake is forgetting to add the line 8 amount to Form 540, line 63. The consequence is the FTB adding it for you and assessing a math-error penalty.
A misconception is that ABLE distributions never trigger this tax. They do whenever the distribution exceeds qualified disability expenses for the year.
Part III, Line 9 – Archer MSA Distributions
Line 9 captures the taxable Archer MSA distribution from line 8 of federal Form 8853.
To answer it, copy the federal Form 8853 line 8 amount onto line 9. Marcus Reilly took a $2,000 Archer MSA distribution to buy a new laptop, not a qualified medical expense, and enters 2000 on line 9.
A nuance is that Archer MSAs are rare and are no longer being established for new participants — most filers will leave this line blank.
The most common mistake is confusing an Archer MSA with a Health Savings Account (HSA). The consequence is reporting an HSA distribution on the wrong form, since HSA distributions go on federal Form 8889 and do not flow to Form 3805P.
A misconception is that any MSA distribution is subject to the 12.5% rate. Only Archer MSA distributions hit 12.5% — qualified Medicare Advantage MSA distributions used for medical expenses are not taxed at all.
Part III, Line 10 – Tax Due on Archer MSA Distributions
Line 10a is a checkbox for filers who meet an exception (death, disability, or age 65). Line 10b multiplies line 9 by 12.5% (.125) for everyone else.
To answer it, check 10a if you qualify, otherwise multiply and enter the result on line 10b. Marcus, age 47 and not disabled, computes 2000 × 0.125 = 250 and writes 250 on line 10b.
A nuance is that the 12.5% rate is California’s higher rate for non-qualified MSA distributions, much steeper than the 2.5% rate elsewhere on the form.
The most common mistake is using 2.5% instead of 12.5% on this line. The consequence is dramatically underpaying state tax and triggering an FTB recalculation notice.
A misconception is that the federal 20% rate also applies to California. It does not — California uses 12.5%, separate and on top of the 20% you pay the IRS.
Part III, Line 11 – Medicare Advantage MSA Additional Tax
Line 11 captures the additional tax on Medicare Advantage MSA distributions, transferred from line 13b of federal Form 8853.
To answer it, copy the federal amount and add it to Form 540, line 63 or Form 540NR, line 73. Most filers leave this line blank because Medicare Advantage MSAs are uncommon.
A nuance is that Form 540NR filers must prorate this amount based on the California-source portion, per the 540NR instructions.
The most common mistake is leaving line 11 blank when federal Form 8853 line 13b shows an amount. The consequence is an underpayment notice and interest.
A misconception is that this line applies to regular Medicare Part C plans. It does not — it applies only to the rare Medicare Advantage MSA combination of a high-deductible plan with a savings account.
Signature Section (Non-Filer Use Only)
The signature block is used only by filers who are not required to file a California income tax return but still owe the additional tax. Most filers will skip it because they file Form 3805P as an attachment to Form 540.
To answer it, sign your name, enter the date, and enter your daytime phone number. A retired non-filer who owes only the 2.5% additional tax signs here and mails the form alone with payment.
A nuance is that non-filers must mail the form with payment to the FTB at the address in the instructions, not staple it to a 540.
The most common mistake is signing this block when you are also filing a Form 540. The consequence is FTB confusion that can delay processing of both forms.
A misconception is that an electronic signature in tax software counts here. It does not — the non-filer signature block requires a wet-ink signature on a paper form.
Three Filled-Out Examples Using Real Scenarios
Scenario 1: Carlos Nguyen — $20,000 Early 401(k) Withdrawal at Age 42
| Form Section | What Carlos Enters |
|---|---|
| Header — Name | CARLOS NGUYEN |
| Header — SSN | 987654321 |
| Line 1 — Early distributions | 20000 |
| Line 2 — Exceptions | 0 (no exception) |
| Line 3 — Subject to additional tax | 20000 |
| Line 4 — Tax due (2.5%) | 500 |
| Lines 5–11 | blank |
| Form 540, Line 63 | 500 (with “FTB 3805P” written to the left) |
Scenario 2: Aisha Brooks — $4,000 Non-Qualified 529 Distribution
| Form Section | What Aisha Enters |
|---|---|
| Header — Name | AISHA BROOKS |
| Header — SSN | 456789012 |
| Lines 1–4 | blank |
| Line 5 — ESA/QTP/ABLE distribution | 4000 |
| Line 6 — Exceptions | 0 |
| Line 7 — Subject to additional tax | 4000 |
| Line 8 — Tax due (2.5%) | 100 |
| Lines 9–11 | blank |
| Form 540, Line 63 | 100 (with “FTB 3805P” written to the left) |
Scenario 3: Janet Park — SIMPLE IRA Early Distribution Within First Two Years
| Form Section | What Janet Enters |
|---|---|
| Header — Name | JANET PARK |
| Header — SSN | 321654987 |
| Line 1 — Early distributions | 10000 |
| Line 2 — Exceptions | 0 |
| Line 3 — Subject to additional tax | 10000 |
| Line 4 — Tax due (6% SIMPLE IRA rate) | 600 |
| Lines 5–11 | blank |
| Form 540, Line 63 | 600 (with “FTB 3805P” written to the left) |
How to File the Completed Form
You can file Form 3805P by e-file, by mail, or in person at an FTB field office. Each channel has different processing times, payment options, and proof-of-filing rules.
E-file with tax software. Use CalFile, TurboTax, H&R Block, or any authorized e-file provider. There is no fee to e-file. Payment is made through Web Pay, EFW (electronic funds withdrawal), or credit card via ACI Payments. Processing takes 7–10 business days, and your software’s confirmation number is your proof of filing.
Mail with a refund return. Send Form 540 and the attached Form 3805P to Franchise Tax Board, PO Box 942840, Sacramento, CA 94240-0001. There is no fee. Allow 8–12 weeks for processing. Use USPS Certified Mail with Return Receipt as proof of filing.
Mail with a balance-due return. Send Form 540 and Form 3805P with payment to Franchise Tax Board, PO Box 942867, Sacramento, CA 94267-0001. The fee is whatever you owe, payable by check, money order, or Web Pay. Processing takes 8–12 weeks. Keep your canceled check or Web Pay confirmation.
Non-filer mailing. If you owe only the additional tax and have no other California filing requirement, mail the signed Form 3805P with payment to the address in the instructions. Processing takes 6–8 weeks, and the canceled check is your proof.
In person. You can drop off the form at any FTB Field Office. The clerk will date-stamp your copy as proof of filing. There is no fee for filing in person, but you cannot pay cash for the additional tax.
What Happens After You File
After the FTB receives your return, the additional tax from Form 3805P is added to your total California tax on line 64 of Form 540. If you had California withholding or estimated payments that cover the new tax, you receive any leftover refund within 8–12 weeks for paper returns or 2–3 weeks for e-filed returns.
If your withholding does not cover the additional tax, the FTB sends a Notice of Tax Due for the unpaid amount plus interest from April 15 of the filing year, even if you filed on extension. Interest accrues daily at the FTB’s adjusted rate, which has been between 7% and 10% in recent years.
The FTB cross-checks every Form 3805P against the federal Form 5329 data-share file from the IRS. If your federal and California exception amounts differ — for example, if you claimed an IRA-to-HSA rollover exception federally — expect a Form 4734D verification letter within 12–18 months asking for documentation.
If you discover an error after filing, file Form 540X (Amended Return) with a corrected Form 3805P attached. You have four years from the original due date to amend without losing your refund right.
Mistakes to Avoid When Filling Out the Form
- Using the federal 10% rate instead of California’s 2.5%. This overstates your California tax fourfold and forces you to file an amended return.
- Skipping Form 3805P because you already filed Form 5329. California requires its own form even though the federal penalty is calculated separately.
- Claiming an IRA-to-HSA exception on line 2. California does not conform; the FTB will deny the exception and bill you 2.5% plus interest.
- Using the wrong exception code. California’s two-digit codes do not always match federal codes; using the wrong one triggers a denial letter.
- Forgetting the SIMPLE IRA 6% rate in the first two years. This understates your tax and produces an FTB recalculation notice.
- Failing to add line 4, line 8, line 10b, and line 11 to Form 540, line 63. The FTB will add it for you and tack on a math-error penalty.
- Not writing “FTB 3805P” to the left of Form 540, line 63. The FTB cannot match the additional tax to the form and may issue a notice asking for documentation.
- Filing both spouses’ early distributions on one form. Each spouse needs a separate Form 3805P; combining them voids the form.
- Including 401(k) loans on line 1. Loans are not distributions unless they default and are reported with code L on Form 1099-R.
- Submitting last year’s revision of the form. The FTB rejects mismatched-year forms and delays processing by 60 days or more.
Do’s and Don’ts
- Do file Form 3805P even if you already filed federal Form 5329, because California’s tax is separate.
- Do keep documentation for every exception you claim, including separation letters, medical bills, and disability determinations.
- Do verify the exception code in the FTB 3805P instructions, not the federal Form 5329 instructions.
- Do file a separate form for each spouse on a joint return who took an early distribution.
- Do write “FTB 3805P” to the left of Form 540, line 63 so the FTB can match the entries.
-
Do double-check that line 4 uses 2.5% (or 6% for SIMPLE IRAs in the first two years), not the federal 10%.
-
Don’t assume California conforms to every federal exception — IRA-to-HSA and disaster-related exceptions often do not apply.
- Don’t include rolled-over amounts on line 1 if the rollover happened within the 60-day window.
- Don’t combine Coverdell, 529, and ABLE distributions onto separate forms; they all go on lines 5–8 of one Form 3805P.
- Don’t sign the non-filer signature block if you are also filing Form 540, because doing so confuses processing.
- Don’t forget to attach Form 3805P to your paper Form 540, since loose forms are not always matched to the right return.
- Don’t rely on tax software defaults; review the form on screen before transmitting because the software can mis-code rollovers.
Pros and Cons of Filing on Your Own vs. With Help
Pros of filing on your own – It costs nothing if you use CalFile or fillable PDFs because the form is short. – You learn the rules, which helps you make better retirement-distribution decisions in future years. – You control the timing of the payment and can pay by Web Pay the same day you file. – Simple cases (one early 401(k) distribution, no exceptions) take less than 30 minutes. – You avoid a CPA fee that often runs $150 to $400 just for adding this form.
Cons of filing on your own (use a pro instead) – Multiple distribution types (401(k) + 529 + Archer MSA) increase the chance of a coding error. – California’s non-conformity rules around IRA-to-HSA, disaster relief, and the Rule of 55 confuse most lay filers. – Mixed SIMPLE IRA and traditional IRA distributions require a blended rate calculation that most software handles poorly. – Inherited-IRA distributions involve beneficiary rules that interact with both federal and California law. – An amended return to fix a Form 3805P error costs more in interest and penalties than the original CPA fee would have.
Online Filing vs. Paper Filing
| Filing Method | Key Features |
|---|---|
| Online (CalFile or e-file software) | Free or low cost, 2–3 week processing, automatic math checks, Web Pay integration, instant confirmation |
| Paper (mail-in Form 540 + 3805P) | No software needed, 8–12 week processing, requires manual math, USPS Certified Mail recommended for proof |
FAQs
Do I have to file Form 3805P if I already filed federal Form 5329?
Yes. California has its own additional tax at 2.5% (or 6% for SIMPLE IRAs in the first two years), and the FTB requires Form 3805P even when federal Form 5329 is also filed.
Does California recognize the Rule of 55 for 401(k) distributions?
Yes. Exception code 01 on Form 3805P covers separation from service in or after the year you turn 55, mirroring the federal rule for qualified employer plans.
Is an IRA-to-HSA rollover taxed in California?
Yes. California does not conform to the federal IRA-to-HSA rollover exception, so the entire distribution is added to California AGI and the 2.5% additional tax applies.
Do I write my federal exception code or California exception code on line 2?
No. Use only the California exception code from the FTB 3805P instructions, even though the codes often look similar to the federal codes on Form 5329.
Should I include 401(k) loan amounts on line 1?
No. A 401(k) loan is not a distribution unless it defaults and is reported on Form 1099-R with distribution code L.
Do K-12 tuition 529 distributions get reported on line 5?
Yes. California does not conform to the federal K-12 529 rule, so up to $10,000 of K-12 tuition paid from a 529 is non-qualified for California purposes.
Can I e-file Form 3805P with my California return?
Yes. CalFile, TurboTax, H&R Block, FreeTaxUSA, Drake, and Lacerte all support e-filing Form 3805P attached to Form 540 or 540NR.
Does the 2.5% rate apply to Roth IRA conversions?
No. A Roth conversion is not an early distribution, but if you withdraw converted funds within five years and before age 59½, the conversion amount goes on line 1.
Do both spouses on a joint return file one combined Form 3805P?
No. Each spouse who took an early distribution files a separate Form 3805P, and the totals are combined on Form 540, line 63.
Should I fill in the signature block at the bottom of the form?
No. Sign there only if you are not required to file a Form 540 or 540NR; otherwise leave it blank because your Form 540 signature covers Form 3805P.
Is the penalty for a non-qualified ABLE distribution the same 2.5% rate?
Yes. ABLE, Coverdell ESA, and 529 distributions all use the 2.5% rate on line 8 of Part II.
Do I owe California’s 2.5% on a coronavirus-related distribution from 2020 spread over three years?
Yes. California did not conform to the federal CARES Act exception, so the spread-amount portion remains subject to the 2.5% additional tax in each year it is included in income.
Related reading
- How to Fill Out FTB Form 540 (w/Examples) + FAQs
- Are Household Employers Required to Register for CalSavers? (w/Examples) + FAQs
- How to Fill Out California Form NC-210 (w/Examples) + FAQs
- How to Fill Out California Form 540 2EZ (w/Examples) + FAQs
- How to Fill Out California Form 540-ES (w/Examples) + FAQs
- How to Fill Out California Form 541 (w/Examples) + FAQs
- How to Fill Out California Form 100 (w/Examples) + FAQs