Tax Relief Services
California FTB Tax Resolution: Payment Plans, Levies and Wage Withholding Orders
Updated
The Franchise Tax Board collects faster than the IRS and publishes fewer options. Its payment plan has a dollar limit, a term limit, a setup fee and a filing requirement, and its collection tools reach wages and bank accounts through orders with their own names. A Californian who owes both agencies has two problems that have to be solved together, because each plan is a monthly payment the other one has to leave room for.
The short answer: California FTB tax resolution means getting a Franchise Tax Board balance onto terms the FTB will accept and getting its collection orders released. The FTB offers a personal installment agreement if the amount due does not exceed $25,000, you can pay it in 60 months or less, and you have filed all income tax returns for the past 5 years.
It says the request may take up to 90 days to process, costs $34 added to the balance, and that a tax lien may be a condition. It collects through a Notice of State Tax Lien, an Earnings Withholding Order for Taxes that can take up to 25% of your pay, and an Order to Withhold on bank accounts that takes 100% of available assets up to the balance due. The FTB has 20 years to collect, twice the IRS's 10.
Owe the Franchise Tax Board, or Both the FTB and the IRS?
Send us the FTB notice, and the IRS one if there is one. We set up plans that fit each agency's rules and each other. Free, confidential review, no obligation.
How the FTB is different from the IRS
The Franchise Tax Board administers California's income tax and collects what is owed on it, and its pages are terser than the IRS's. Its payment page says your account balance is subject to accruing interest and applicable penalties until paid in full, that Web Pay from a bank account is free, that card payments carry fees, and that payment plans are available to eligible taxpayers, subject to fees. It also warns about third-party payment sites that charge excessive fees or are designed to look affiliated with the FTB. Its pages are Pay and Payment plans.
The practical differences are speed, limits and time. The FTB's plan has a hard dollar cap and a hard term. Its collection orders go out on a shorter fuse than the IRS's notice sequence, and it intercepts refunds routinely; our guide to the FTB refund intercept covers that one.
And the FTB has 20 years to collect a liability (R&TC 19255), measured from the date the latest liability for that tax year became due and payable, while the IRS generally has 10 years from the date the tax was assessed. A new assessment, including a collection cost recovery fee or lien fee, resets the FTB's 20 years, and the clock is suspended during bankruptcy and while a payment plan is in place.
How a Franchise Tax Board installment agreement works
A Franchise Tax Board installment agreement is the FTB's payment plan. For an individual the FTB says you may be eligible if the amount due does not exceed $25,000, you can pay the amount in 60 months or less, and you have filed all your income tax returns for the past 5 years. If approved it costs $34, added to your balance, and the acceptance letter comes by mail with the payment details. The request may take up to 90 days to process.
Where to apply: online through the FTB's payment plan page if none of the blockers below apply, by phone at the FTB's number for personal plans, 800-689-4776, or by mail on the Payment Plan Request Form. Business plans use 888-635-0494. While the request is pending the FTB says to keep making payments, to avoid more interest and penalties and to prevent the balance being sent to collections or your wages garnished. That line is the one people skip, and it is why a plan request and a wage order can cross in the mail.
What stops it: the FTB closes the online route if you already have a current installment agreement with it, a wage garnishment (earnings withholding order), a bank levy (order to withhold), or another collection order such as a warrant or continuous order to withhold. In those cases it says to call.
A balance over $25,000 or a term longer than 60 months is outside the published plan, and the FTB does not publish terms for those cases beyond two sentences: you may have to submit a financial statement for approval, and a tax lien may be a condition of your arrangement. Missing returns stop it too, because the five filed years are an eligibility condition, not a courtesy.
The business plan follows the same shape with tighter terms: an amount due of $25,000 or less, payment in 12 months or less, all tax returns filed, up to 90 days to process, and a $50 setup fee added to the balance. The FTB notes its business self-service has limited availability and may not be open to every business.
The calculator shows what a monthly figure looks like against the 60-month limit and the $25,000 cap, and our FTB payment plan guide walks through the application screen by screen. If you also owe the IRS, the IRS payment plan calculator sizes the federal payment so the two can be set side by side.
What an FTB tax levy (Order to Withhold) is and how it is released
A tax levy in California from the FTB arrives as an Order to Withhold for Taxes, form FTB 2900. The FTB says it uses orders to withhold to legally take your property to satisfy an outstanding balance, and that it may take money from your bank account or other financial assets, or collect personal property or anything of value that belongs to you but sits with a third party. For personal income tax the order collects 100% of all assets available or the entire balance due, whichever is less. A bank that receives one is legally required to send the funds after the holding period stated on the order.
There is also a Continuous Order to Withhold, FTB 2910, which attaches to payments you are entitled to, such as rent owed to you or a business's receivables, and stays in effect for 12 months or until the balance is paid, whichever comes first. It collects 25% of each payment for an individual and 100% for a business entity.
How it is released. The FTB's own answer is blunt: the most effective way to stop a levy is to pay in full, then call the number on the order with your bank's fax number ready. Short of that, three routes exist. If the levy was issued in error, call the number on the order; the FTB says it will release the levy if it agrees, and if the error was its own you can write within 90 days of the notice date to be reimbursed for bank charges.
If you have a financial hardship, the FTB says it may modify the levy, and that conversation happens at the number on your letter; it cannot reduce the total balance. And if the account holds only Social Security income or belongs to someone else, the FTB says to call so it can review whose property it is. A payment plan set up by phone, since the online route is closed once an order exists, is how most of our clients get the next order stopped. Our bank levy release page covers the IRS side of this.
FTB wage withholding: the Earnings Withholding Order for Taxes
Franchise Tax Board withholding from a paycheck comes through an Earnings Withholding Order for Taxes, form FTB 2905. It requires your employer to withhold and send part of your wages until the balance on the order is paid in full or the FTB releases it. The FTB says a personal income tax wage garnishment can collect up to 25% of your pay.
The exact figure comes from its payment amount table: the employer subtracts federal income tax, Social Security, state income tax and state disability insurance from gross pay, and sends 25% of what is left once pay after subtractions passes a threshold ($290.01 a week, $580.01 every two weeks, $628.29 twice a month, $1,256.01 a month). Below a lower floor nothing is withheld, and in between only the amount above the floor goes.
The employer's side is strict. It must give you a copy of the order within 10 days, send the first payment within 15 days of the last pay period, and keep sending until the balance is paid. The FTB may hold an employer responsible for the debt if it does not comply, and it says only the FTB can adjust or modify the amount; if it does, it sends the employer a new order.
How to stop it. Paying in full releases it, after which you call the number on the order. The FTB says it may modify a wage garnishment for financial hardship, by phone at the number on your letter, with your payroll fax number ready.
Individuals can also log in to MyFTB to check whether they are eligible to request a modification to lower the amount withheld per payment. And because an active EWOT blocks the online payment plan, the realistic path is a phone-set installment agreement that replaces the order with a payment you chose. Our wage garnishment release page covers the IRS version, which runs on a different exemption table.
How the FTB collects, and how that compares to the IRS
The FTB's collections page lists its tools: liens; withholding orders, which it describes as wage garnishments and other levies; and its eGarnishment program, which serves withholding orders to employers electronically. It also lists the intercepts it runs and participates in, including collections for federal debts through the Treasury Offset Program and for other states through the Multistate Offset Program.
So an FTB balance can reach a federal refund, and an IRS balance can reach a California one. The FTB says a statutory lien attaches to all your California property automatically once you owe, and that if you do not respond, pay, or set a payment plan it may record a Notice of State Tax Lien, which is public record and effective for at least 10 years.
| Tool | California FTB | IRS |
|---|---|---|
| Wage garnishment | Earnings Withholding Order for Taxes (FTB 2905); up to 25% of pay after required deductions, until paid or released | Wage levy; continuous each pay period until released, with an exempt amount set by Publication 1494 from filing status and dependents |
| Bank levy | Order to Withhold for Taxes (FTB 2900); 100% of available assets or the balance due, whichever is less | Bank levy; funds are held and after 21 days sent to the IRS |
| Ongoing payments to you | Continuous Order to Withhold (FTB 2910); 12 months, 25% per payment for individuals, 100% for business entities | Levy on accounts receivable or other rights to payment |
| Lien | Statutory lien arises automatically; Notice of State Tax Lien recorded with a county or filed with the Secretary of State, effective at least 10 years | Federal tax lien arises after assessment, notice and demand, and nonpayment; Notice of Federal Tax Lien filed publicly |
| Refund intercept | Takes state refunds; participates in the Treasury Offset Program and the Multistate Offset Program | Takes federal refunds; offsets run both ways between the IRS and California through the Treasury Offset Program |
| Time to collect | 20 years (R&TC 19255); reset by a new assessment, suspended during a payment plan or bankruptcy | Generally 10 years from the date of assessment (the CSED) |
| Release route | Pay in full and call the number on the order; error, hardship, Social Security or third-party property reviewed by phone; modification requests through MyFTB for individuals | Payment plan, Currently Not Collectible, Offer in Compromise, or a release for economic hardship |
FTB figures from Franchise Tax Board, Help with withholding orders · Liens · Statute of limitations on collection actions. IRS figures from IRS, Levy · Time IRS can collect tax.
Owing both: the problem nobody's page mentions
The FTB's pages are about the FTB. The IRS's pages are about the IRS. A Californian who owes both has two monthly payments to set, and each agency's financial statement asks what you pay the other. A plan set with the IRS that ignores the FTB, or the reverse, is a plan that defaults the moment the second agency's order arrives.
The order in which the two are set up, and the amounts, are the whole job for these clients, and it is the part no single agency's page can help with. Our IRS back taxes page covers the federal options; this page covers the state ones; the engagement covers both.
What Clarity does with an FTB balance
We start with both agencies' records. For the FTB that is the account and notice history; for the IRS it is the transcript. From them we know the balances, the returns still missing, the orders already issued, and the deadlines each agency is working to.
- We file what is missing, because the FTB requires five years of filed returns before it will set up a plan.
- We apply within the FTB's rules, online where the account allows it, by phone where an order has closed that door, with the financial statement the FTB says it may require.
- We coordinate the two plans so that both are payments you can carry, and we set the federal one with the state one already known.
- We pursue release of orders already in place, and we address the lien condition before it is imposed rather than after.
- We take the contact with both agencies under the appropriate authorizations.
The investigation fee is $495 for an individual and $695 for a business. It covers the FTB and IRS record pulls, the combined balance review and a written plan for both, and it comes with a 30-day money-back policy from the date you sign. You have the written agreement before anything is charged. Our pricing promise spells out what is and is not included, and our tax relief cost comparison shows how that fee sits against the national firms' retainers.
The hard part, stated plainly
The hard part is the FTB's ceiling. A personal balance over $25,000, or one that cannot be cleared in 60 months, does not fit the published plan, and the FTB's page does not describe what happens next beyond the words financial statement and lien. Those cases are handled by phone with a collector and the outcome depends on the numbers presented. We do not promise a particular arrangement for a balance above the limit, because the FTB does not publish one.
The second hard part is the 90 days. The FTB says to keep paying while a request is pending, and it means it: an order to withhold can issue during those 90 days on an account that has stopped paying, and then the online route closes and the plan has to be rebuilt by phone.
When you do not need anyone
If your FTB balance is under $25,000, your returns for the last five years are filed, you can pay it within 60 months, and no collection order has issued, the FTB's online application is designed for you. Apply, keep paying while it processes, and pay the $34. No firm is needed and we will say so.
Where a review earns its fee: the balance is over the limit, returns are missing, an earnings withholding order or order to withhold has already issued, the FTB has raised a lien as a condition, or you owe the IRS as well and the two plans have to fit together. Those are the cases where the sequencing decides whether both plans survive.
California FTB Tax Resolution Questions, Answered
Can I set up a payment plan with the California FTB?
Yes. The FTB says you may be eligible for a personal installment agreement if the amount due does not exceed $25,000, you can pay it in 60 months or less, and you have filed all your income tax returns for the past 5 years. It says the request may take up to 90 days to process, costs $34 added to your balance if approved, and that a financial statement may be required and a tax lien may be a condition.
How long does the FTB take to approve a payment plan?
The FTB says it may take up to 90 days to process a request, and that while it is processing you should still make payments to avoid more interest and penalties and to prevent the balance being sent to collections or your wages garnished. Approval arrives as an acceptance letter by mail with the payment details.
Why can't I apply for an FTB plan online?
The FTB says you cannot apply online if you have a current installment agreement with it, an earnings withholding order, which is a wage garnishment, an order to withhold, which is a bank levy, or another collection order such as a warrant or continuous order to withhold. In those cases it says to call to apply.
How does the FTB collect unpaid tax?
The FTB lists liens, withholding orders including wage garnishments and other levies, and its eGarnishment program. It also runs and participates in refund intercepts, including collections for federal debts through the Treasury Offset Program and for other states through the Multistate Offset Program, and publishes a statute of limitations on collection actions.
Does an FTB payment plan involve a lien?
It can. The FTB's payment plan page says a tax lien may be a condition of your arrangement, and that you may have to submit a financial statement for approval. Both are worth understanding before applying, particularly if you plan to borrow against or sell property during the plan.
What is an FTB Order to Withhold, and is it the same as a tax levy?
Yes, it is the FTB's levy. An Order to Withhold for Taxes (FTB 2900) tells a bank or other third party to send the FTB your money or property to satisfy the balance. For personal income tax it collects 100% of all assets available or the entire balance due, whichever is less. A Continuous Order to Withhold (FTB 2910) attaches to payments owed to you for 12 months at 25% per payment for an individual and 100% for a business entity.
How much can the Franchise Tax Board withhold from my wages?
The FTB says a personal income tax wage garnishment, issued as an Earnings Withholding Order for Taxes (FTB 2905), can collect up to 25% of your pay until the balance is paid in full or the order is released. The employer first subtracts federal income tax, Social Security, state income tax and state disability insurance, and the FTB's payment amount table sets a floor below which nothing is withheld.
How do I stop an FTB wage garnishment or bank levy?
The FTB says the most effective way is to pay in full and then call the number on the order. Otherwise, call the number on your letter to report an order issued in error, to ask for a financial hardship modification, or to explain that the funds are Social Security income or belong to someone else. Because an active order blocks the online payment plan, a plan set up by phone is the usual route to replacing the order with a payment you can carry.
How long does the FTB have to collect a tax debt?
The FTB says it has 20 years to collect on a liability under Revenue and Taxation Code section 19255, generally counted from the date the latest tax liability for that year became due and payable. A new assessment, such as a collection cost recovery fee or lien fee, resets the 20 years, and the clock is suspended during bankruptcy and while a payment plan is in place. The IRS generally has 10 years from assessment.
What if I owe both the FTB and the IRS?
Each agency sets its plan by its own rules, and each asks in its financial statement what you pay the other. The two monthly payments have to fit together, and the order in which they are set up matters, because a plan with one agency that leaves no room for the other defaults when the second agency's order arrives. That coordination is the core of the work for a taxpayer who owes both.
Results vary based on individual facts and circumstances. Not every taxpayer qualifies for an FTB installment agreement, terms for balances above the FTB's published limits are not published, and no specific outcome is guaranteed. This page is general information about California Franchise Tax Board tax debt, not tax or legal advice.
Related Services: FTB Payment Plan Calculator · IRS Back Taxes Help · Wage Garnishment Release · Bank Levy Release · or return to All Tax Relief Services.
FTB payment plan rules, personal and business, as the Franchise Tax Board publishes them
| Rule | Personal | Business |
|---|---|---|
| Maximum amount due | $25,000 | $25,000 |
| Maximum payment period | 60 months or less; typically 3 to 5 years | 12 months or less |
| Filing requirement | All income tax returns filed for the past 5 years | All tax returns filed |
| Processing time | Up to 90 days; keep paying while pending | Up to 90 days; keep paying while pending |
| Setup fee | $34, added to the balance | $50, added to the balance |
| How to apply | Online, by phone at 800-689-4776, or by mail on the Payment Plan Request Form | Online (limited availability) or by phone at 888-635-0494 |
| Conditions the FTB names | A financial statement may be required; a tax lien may be a condition | A financial statement may be required; a tax lien may be a condition |
| Cannot apply online if | You have a current agreement, an earnings withholding order, an order to withhold, or another collection order (warrant, continuous order to withhold) | You have a current agreement, an order to withhold, or a continuous order to withhold |
| Compare: IRS long-term plan | Online if you owe $50,000 or less in combined tax, penalties and interest; setup fee $29 by direct debit online or $69 otherwise, $107 or $178 by phone, mail or in person, waived or $43 for low-income taxpayers; short-term plans of 180 days or less carry no setup fee if you owe less than $100,000 | |
Figures from Franchise Tax Board, Payment plans · Franchise Tax Board, Pay · Franchise Tax Board, Collections · IRS, Payment plans and installment agreements.
“You may have to submit a financial statement for approval. A tax lien may be a condition of your arrangement.”
Franchise Tax Board, Payment plans
The passage quoted above is from Franchise Tax Board, Payment plans.