OVERPAYMENTS AND UNDERPAYMENTS - 8241

(Revised: 10/2020)

An overpayment is when a payer’s payment exceeds what is due or necessary. An underpayment is when a payer’s payment is insufficient or less than what is due to the state. Below are the processes for handling overpayments and underpayments.

Overpayments

 

In accordance with applicable provisions of law, overpayments may be: 

 

• Applied against other amounts due the state from the payers,
• Refunded automatically, or
• Held pending receipt of refund requests.

Government Code section 16302.1 permits state agencies/departments to remit overpayments of $10.00 or less to the Treasury as other taxes, penalties, interest, license, or other fees, or any other amount due to the state, subject to the right of the payer to make a claim for refund if otherwise authorized by law.

 

Underpayments

 

Government Code section 12438 authorizes state agencies/departments to refrain from collecting taxes, licenses, fees, and money owing to the state where the amount to be collected is $500 or less if the collection efforts have been exhausted, and all reasonable collection procedure do not result in payment. See SAM section 8293.5 for instructions regarding Discharging Uncollectible Amounts and Write off Procedures and 8293.1, Non-Employee Accounts Receivable.