2014 Tax Return Information
January 26, 2015
To: All Admitted Insurers, Surplus Line Brokers, and Other Interested Parties
Subject: 2014 TAX RETURN INFORMATION
The 2014 tax filing for Surplus Line Brokers is due to the California Department of Insurance (CDI) on March 1, 2015, and the annual tax filing for Insurers is due on April 1, 2015, except for the Ocean Marine insurance tax filing, which is due on June 15, 2015. Important tax filing information is as follows:
- Each insurer or surplus line broker is required to file a tax return for all business transacted during the preceding calendar year. Please note that if you had no business transacted in 2014 or you started your business in 2014, you are still required to file a tax return by the appropriate required due date. (California Revenue and Taxation Code section 12302 and California Insurance Code section 1774) For surplus line brokers with no taxable premiums to report, please use CDI's tax return CDI FS-006-0 (REVISED 09/2014). Note: Effective Tax Year 2013, individually licensed and endorsed surplus line brokers who transact or write business on behalf of a surplus line broker organization are no longer required to file a Zero Premium Tax Return. For more details, please refer to the December 9, 2013 Zero Premium Tax Returns and Reporting Requirements Notice posted on CDI's website.
- Each insurer or surplus line broker whose annual tax for the preceding calendar year was twenty thousand dollars ($20,000) or more is required to make quarterly prepayments or monthly installment payments for the current calendar year. Specifically, if your 2014 tax liability was $20,000 or more, you are required to make the quarterly prepayments or monthly installment payments for 2015. Note: This is an increase from the previous $5,000 annual tax threshold. For more details regarding this change, please refer to the two notices posted on CDI's website (Notice of Change in Surplus Line Premium Tax Monthly Installment Payment Requirements and Notice of Change in Admitted Premium Tax Quarterly Prepayment Requirements).
- Each insurer or surplus line broker whose annual tax for the preceding calendar year was more than twenty thousand dollars ($20,000) is required to make payment by Electronic Funds Transfer (EFT). Specifically, if your 2014 tax liability exceeded $20,000, you are required to make all 2015 tax payments (monthly, quarterly, and annual) by EFT. To avoid delay in processing your EFT payments, it is critical that you provide the correct Taxpayer Identification Number, tax type code, and tax due date in your EFT transaction. If you need assistance with establishing an EFT account or experience any problems with making your EFT payment by the required due dates, please contact us at (916) 492-3288 prior to the payment due date to avoid any potential penalty assessment. (California Revenue and Taxation Code section 12602 and California Insurance Code sections 12976.5 and 1775.8).
- Please provide a contact person's e-mail address on your tax return to ensure that your company receives the latest tax updates from CDI.
- Please file only one (1) original tax return form with CDI.
All 2014 Tax Forms, Instructions and Information and all Notices referenced within this letter can be obtained on CDI's website at www.insurance.ca.gov using the search feature. To obtain the "California Tax on Insurers" Guide, please refer to www.boe.ca.gov and under "Forms &Pubs", select "Business Taxes Law Guide", then under "Table of Contents", access Volume 4, Tax on Insurers.
If you are unable to access the CDI website, prefer to obtain a hard copy of a tax form, or have any questions regarding tax payments, please contact us at (916) 492-3288.
ERIKA SPERBECK, DEPUTY COMMISSIONER