Notice of Tax Return Change (FTB 5818): the Code at the Bottom Is the Notice

Updated August 7, 2026. Quick answer: a Notice of Tax Return Change (FTB 5818) means California corrected something on your return. 🔴 The notice itself barely tells you what — the two-character code at the bottom of each paragraph does. Franchise Tax Board publishes the code table, and reading your code is the difference between understanding the notice and guessing at it.

What this notice is

FTB is explicit about when it sends one: “You receive this notice when we correct one or more mistakes on your tax return.” And it is scoped tightly — “the information is only for the tax year printed at the top of the notice.”

It is a change notice, not an audit and not a bill by itself. The change may increase what you owe, shrink your refund, or simply move money between the boxes you asked for.

🔴 The codes are the notice

FTB puts it plainly: “Notice of Tax Return Change letters contain one or more alphanumerical code at the bottom of the page.” The narrative paragraph tells you something changed. The code tells you what. A notice can carry several, and FTB’s own guidance is to read them together — several codes end with “see any other code(s) on the notice first for more information.”

Some of the common ones, in FTB’s own words:

• 02 — “You owed money to a government agency, which may include us. We applied the overpayment from your return to that liability.” 🔴 Your refund was taken by an offset, and possibly not by the tax authority at all. FTB’s instruction is to contact the agency named on the notice, because it is that agency’s debt, not necessarily a tax one.
• 04 — the overpayment was applied to a balance already on your own account.
• 05 and 12 — penalties, fees and/or interest were imposed, reducing a refund or revising a balance.
• AA — “We corrected an error and revised the amount of California adjusted gross income on your return.” The one worth checking hardest: if your California AGI moved, downstream credits and phase-outs can move with it.
• AB — multiple errors corrected and the return processed as filed information allowed.
• 14, 15, 16 — the direct-deposit request was disallowed and converted to a paper check. Nothing is wrong with your money; FTB cannot deposit more than two refunds into one account, and a changed refund amount voids the deposit instruction.
• 01, 03, 06, 08–11, 17, 18 — the contribution-fund and use-tax family: amounts you designated were reduced, redistributed or could not be transferred.

🔴 The four-year rule hiding in code 11

Code 11 carries a limit that has nothing to do with contributions and applies to any refund you might later want:

Unless you have filed a timely claim, we cannot allow a credit or refund after the later of the following dates: (a) Four years from the original due date of the return. (b) Four years from the date you filed the return, if filed within the extension period. (c) One year from the date you overpaid your income taxes.

“The later of” is doing real work there — the one-year clock from the date of overpayment can outlast the four-year clocks, or fall well inside them, depending on when the money actually moved.

If you agree, and if you do not

FTB’s own instruction if the change is right is refreshingly short: “You don’t need to contact us” — update your records and settle any balance. There is no form to return simply to agree.

If you disagree, FTB directs you to gather and review the relevant tax documents, check for errors, optionally upload supporting documents to a MyFTB account, and contact them with your code in hand. ⚠️ Not every notice can be answered by electronic upload — FTB says so directly, and the notice you hold specifies its own response routes.

What this page does not cover

This decodes a change notice. It does not cover collection instruments — liens, levies, garnishment or the machinery that follows an unpaid balance — and it does not advise on paying or settling anything. If a notice is ignored, a balance can move into collection; that is a factual consequence, not this page’s subject.

Sources

Quotations and codes from the Franchise Tax Board’s own Notice of Tax Return Change page and its notices and letters index, retrieved 7 August 2026. ⚠️ The code table is long and FTB updates it — the codes above are a working subset, not the complete list. Check your own code against FTB’s current table; that is the authoritative version and it is free to read.

Related: the state tax notices index · the federal equivalents: the IRS math-error notice and CP2000.