loading…
loading…
loading…
April 15, 2025* Last day to file and pay the 2024 amount you owe to avoid penalties and interest.* See form FTB 3519, Payment for Automatic Extension for Individuals, for more information. See " Interest and Penalties " section for information regarding a one-time timeliness penalty abatement. * If you are living or traveling outside the United States on April 15, 2025, the dates for filing your tax return and paying your tax are different. See form FTB 3519 for more information. October 15, 2025 Last day to file or e-file your 2024 tax return to avoid a late filing penalty and interest computed from the original due date of April 15, 2025. April 15, 2025 June 16, 2025 September 15, 2025 January 15, 2026 The dates for 2025 estimated tax payments. Generally, you do not have to make estimated tax payments if the total of your California withholdings is 90% of your required annual payment. Also, you do not have to make estimated tax payments if you will pay enough through withholding to keep the amount you owe with your tax return under $500 ($250 if married/registered domestic partner (RDP) filing separately). However, if you do not pay enough tax either through withholding or by making estimated tax payments, you may have an underpayment of estimated tax penalty. Get Form 540-ES instructions for more information.
Federal Earned Income Credit (EIC) – Go to the Internal Revenue Service (IRS) website at irs.gov/taxtopics and choose topic 601 , get the federal income tax booklet, or go to irs.gov and search for eitc assistant .
California Earned Income Tax Credit (EITC) – EITC reduces your California tax obligation, or allows a refund if no California tax is due. You may qualify if you have wage income earned in California and/or net earnings from self‑employment of less than $31,951. You do not need a child to qualify. For more information, go to ftb.ca.gov and search for eitc or get form FTB 3514, California Earned Income Tax Credit.
Young Child Tax Credit (YCTC) – YCTC reduces your California tax obligation, or allows a refund if no California tax is due. You may qualify for the credit if you qualified for the California EITC or you would otherwise have been allowed the California EITC but you have earned income of zero dollars or less, and you have at least one qualifying child who is younger than six years old as of the last day of the taxable year. For more information, see the instructions for Form 540, California Resident Income Tax Return, line 76, and get form FTB 3514, or go to ftb.ca.gov and search for yctc .
Foster Youth Tax Credit (FYTC) – FYTC reduces your California tax obligation, or allows a refund if no California tax is due. You may qualify for the credit if you qualified for the California EITC, age 18 to 25, were in foster care while 13 years of age or older and placed through the California foster care system. For more information, see the instructions for Form 540, line 77, and get form FTB 3514, or go to ftb.ca.gov and search for fytc .
Help us process your tax return quickly and accurately. When we find an error, it requires us to stop to verify the information on the tax return, which slows processing. The most common errors consist of:
Claiming the wrong amount of estimated tax payments.
Claiming the wrong amount of standard deduction or itemized deductions.
Claiming a dependent already claimed on another return.
The amount of refund or payments made on an original return does not match our records when amending your tax return.
Claiming the wrong amount of withholding by incorrectly totaling or transferring the amounts from your federal Form W-2, Wage and Tax Statement.
Claiming the wrong amount of real estate withholding.
Claiming the wrong amount of exemption credits.
Verify the amount of estimated tax payments claimed on your tax return matches what you sent to the Franchise Tax Board (FTB) for that year. Go to ftb.ca.gov and login or register for MyFTB to view your total estimated tax payments before you file your tax return.
Verify the overpayment amount from your 2023 tax return you requested to be applied to your 2024 estimated tax.
See Form 540, line 18 instructions and worksheets for the amount of standard deduction or itemized deductions you can claim.
Go to ftb.ca.gov and login or register for MyFTB to verify withheld amount or see instructions for Form 540, line 71. Confirm only California income tax withheld is claimed.
Verify real estate or other withholding amount from Form 592-B, Resident and Nonresident Withholding Tax Statement, and Form 593, Real Estate Withholding Statement. See instructions for Form 540, line 73.
Go to ftb.ca.gov and login or register for MyFTB to check tax return records for refund or payments made.
Verify the amount from your original return Form 540, line 115 and include any adjustment by the FTB.
By using e-file, you can eliminate many common errors. Go to ftb.ca.gov and search for efile options .
Step 1 : Is your gross income (all income received from all sources in the form of money, goods, property, and services that are not exempt from tax) more than the amount shown in the California Gross Income chart below for your filing status, age, and number of dependents? If yes, you have a filing requirement. If no, go to Step 2.
On 12/31/24, my filing status was: and on 12/31/24, my age was: (If your 65th birthday is on January 1, 2025, you are considered to be age 65 on December 31, 2024) 0 dependent 1 dependent 2 or more dependents Single or Head of household Under 65 22,273 37,640 49,165 65 or older 29,723 41,248 50,468 Married/RDP filing jointly Married/RDP filing separately (The income of both spouses/RDPs must be combined; both spouses/RDPs may be required to file a tax return even if only one spouse/RDP had income over the amounts listed.) Under 65 (both spouses/RDPs) 44,550 59,917 71,442 65 or older (one spouse/RDP) 52,000 63,525 72,745 65 or older (both spouses/RDPs) 59,450 70,975 80,195 Qualifying surviving spouse/RDP Under 65 Not Applicable N/A 37,640 49,165 65 or older Not Applicable N/A 41,248 50,468 Dependent of another person – Any filing status Any age More than your standard deduction (Use the California Standard Deduction Worksheet for Dependents to figure your standard deduction.)
Step 2 : Is your adjusted gross income (federal adjusted gross income from all sources reduced or increased by all California income adjustments) more than the amount shown in the California Adjusted Gross Income chart below for your filing status, age, and number of dependents? If yes, you have a filing requirement. If no, go to Step 3.
On 12/31/24, my filing status was: and on 12/31/24, my age was: (If your 65th birthday is on January 1, 2025, you are considered to be age 65 on December 31, 2024) 0 dependent 1 dependent 2 or more dependents Single or Head of household Under 65 17,818 33,185 44,710 65 or older 25,268 36,793 46,013 Married/RDP filing jointly Married/RDP filing separately (The income of both spouses/RDPs must be combined; both spouses/RDPs may be required to file a tax return even if only one spouse/RDP had income over the amounts listed.) Under 65 (both spouses/RDPs) 35,642 51,009 62,534 65 or older (one spouse/RDP) 43,092 54,617 63,837 65 or older (both spouses/RDPs) 50,542 62,067 71,287 Qualifying surviving spouse/RDP Under 65 Not Applicable N/A 33,185 44,710 65 or older Not Applicable N/A 36,793 46,013 Dependent of another person – Any filing status Any age More than your standard deduction (Use the California Standard Deduction Worksheet for Dependents to figure your standard deduction.)
Step 3 : If your income is less than the amounts on the chart, you may still have a filing requirement. See “Requirements for Children with Investment Income” and “Other Situations When You Must File.” Do those instructions apply to you? If yes, you have a filing requirement. If no, go to Step 4.
Step 4 : Are you married/RDP filing separately with separate property income? If no, you do not have a filing requirement. If yes, prepare a tax return. If you owe tax, you have a filing requirement.
California law conforms to federal law which allows parents’ election to report a child’s interest and dividend income from a child under age 19 or a full-time student under age 24 on the parent’s tax return. For each child under age 19 or full-time student under age 24 who received more than $2,600 of investment income in 2024, complete Form 540 and form FTB 3800, Tax Computation for Certain Children with Unearned Income, to figure the tax on a separate Form 540 for your child.
If you qualify, you may elect to report your child’s income of more than $1,300 but less than $13,000 on your tax return by completing form FTB 3803, Parents’ Election to Report Child’s Interest and Dividends. To make this election, your child’s income must be only from interest and/or dividends. To get forms FTB 3800 or FTB 3803, see “ Order Forms and Publications ” or go to ftb.ca.gov/forms .
If you have a tax liability for 2024 or owe any of the following taxes for 2024, you must file Form 540.
Tax on a lump-sum distribution.
Tax on a qualified retirement plan including an Individual Retirement Arrangement (IRA) or an Archer Medical Savings Account (MSA).
Tax for children under age 19 or full-time students under age 24 who have investment income greater than $2,600 (see paragraph above).
Alternative minimum tax.
Recapture taxes.
Deferred tax on certain installment obligations.
Tax on an accumulation distribution from a trust.
Use the same filing status for California that you used for your federal income tax return, unless you are an RDP. If you are an RDP and file single for federal, you must file married/RDP filing jointly or married/RDP filing separately for California. If you are an RDP and file head of household for federal purposes, you may file head of household for California purposes only if you meet the requirements to be considered unmarried or considered not in a domestic partnership.
Exception : If you file a joint tax return for federal purposes, you may file separately for California if either spouse was either of the following:
An active member of the United States armed forces or any auxiliary military branch during 2024.
A nonresident for the entire year and had no income from California sources during 2024. Community Property States : If the spouse earning the California source income is domiciled in a community property state, community income will be split equally between the spouses. Both spouses will have California source income and they will not qualify for the nonresident spouse exception.
If you had no federal filing requirement, use the same filing status for California that you would have used to file a federal income tax return.
If you filed a joint tax return and either you or your spouse/RDP was a nonresident for 2024, file Form 540NR, California Nonresident or Part-Year Resident Income Tax Return.
You are single if any of the following was true on December 31, 2024:
You were not married or an RDP.
You were divorced under a final decree of divorce, legally separated under a final decree of legal separation, or terminated your registered domestic partnership.
You were widowed before January 1, 2024, and did not remarry or enter into another registered domestic partnership in 2024.
You may file married/RDP filing jointly if any of the following is true:
You were married or an RDP as of December 31, 2024, even if you did not live with your spouse/RDP at the end of 2024.
Your spouse/RDP died in 2024 and you did not remarry or enter into another registered domestic partnership in 2024.
Your spouse/RDP died in 2025 before you filed a 2024 tax return.
A married couple or RDPs may file a joint return even if only one had income or if they did not live together all year. However, both must sign the tax return.
Community property rules apply to the division of income if you use the married/RDP filing separately filing status. For more information, get FTB Pub. 1031, Guidelines for Determining Resident Status, FTB Pub. 737, Tax Information for Registered Domestic Partners, or FTB Pub. 1032, Tax Information for Military Personnel. See “ Order Forms and Publications ” or go to ftb.ca.gov/forms .
You cannot claim a personal exemption credit for your spouse/RDP even if your spouse/RDP had no income, is not filing a tax return, and is not claimed as a dependent on another person’s tax return.
You may be able to file as head of household if your child lived with you and you lived apart from your spouse/RDP during the entire last six months of 2024.
For the specific requirements that must be met to qualify for head of household (HOH) filing status, get FTB Pub. 1540, Tax Information for Head of Household Filing Status. In general, HOH filing status is for unmarried individuals and certain married individuals or RDPs living apart who provide a home for a specified relative. You may be entitled to use HOH filing status if all of the following apply:
You were unmarried and not in a registered domestic partnership, or you met the requirements to be considered unmarried or considered not in a registered domestic partnership on December 31, 2024.
You paid more than one-half the cost of keeping up your home for the year in 2024.
For more than half the year, your home was the main home for you and one of the specified relatives who by law can qualify you for HOH filing status.
You were not a nonresident alien at any time during the year.
For a child to qualify as your foster child for HOH purposes, the child must either be placed with you by an authorized placement agency or by order of a court.
California requires taxpayers who use HOH filing status to file form FTB 3532, Head of Household Filing Status Schedule, to report how the HOH filing status was determined.
Beginning in tax year 2018, if you do not attach a completed form FTB 3532 to your tax return, we will deny your HOH filing status. For more information about the HOH filing requirements, go to ftb.ca.gov and search for hoh . To get form FTB 3532, see “ Order Forms and Publications ” or go to ftb.ca.gov/forms .
Check the box on Form 540, line 5 and use the joint return tax rates for 2024 if all five of the following apply:
Your spouse/RDP died in 2022 or 2023 and you did not remarry or enter into another registered domestic partnership in 2024.
You have a child, stepchild, or adopted child (not a foster child) whom you can claim as a dependent or could claim as a dependent except that, for 2024: The child had gross income of $5,050 or more; The child filed a joint return; or You could be claimed as a dependent on someone else’s return.
If the child is not claimed as your dependent, enter the child’s name in the entry space under the "Qualifying surviving spouse/RDP" filing status.
This child lived in your home for all of 2024. Temporary absences, such as for vacation or school, count as time lived in the home.
You paid over half the cost of keeping up your home for this child.
You could have filed a joint tax return with your spouse/RDP the year he or she died, even if you actually did not do so.
In general, for taxable years beginning on or after January 1, 2015, California law conforms to the Internal Revenue Code (IRC) as of January 1, 2015. However, there are continuing differences between California and federal law. When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level. For more information, go to ftb.ca.gov and search for conformity . Additional information can be found in FTB Pub. 1001, Supplemental Guidelines to California Adjustments, the instructions for California Schedule CA (540), California Adjustments – Residents, and the Business Entity tax booklets.
The instructions provided with California tax forms are a summary of California tax law and are only intended to aid taxpayers in preparing their state income tax returns. We include information that is most useful to the greatest number of taxpayers in the limited space available. It is not possible to include all requirements of the California Revenue and Taxation Code (R&TC) in the instructions. Taxpayers should not consider the instructions as authoritative law.
Conformity – For updates regarding federal acts, go to ftb.ca.gov and search for conformity .
Wildfire Relief Payment – For taxable years beginning after December 31, 2019, and before January 1, 2026, the Federal Disaster Tax Relief Act of 2023 allows an exclusion from gross income for any amount received by an individual as a qualified wildfire relief payment. Generally, California law does not conform. If any qualified amount was excluded from income for federal purposes and California law provides no similar exclusion, include that amount in income for California purposes. For more information and for specific wildfire relief payments excluded for California purposes, see Schedule CA (540) instructions .
Reporting Requirements – Taxpayers may need to file form FTB 4197, Information on Tax Expenditure Items, with the tax return to report tax expenditure items as part of the FTB’s annual reporting requirements under R&TC Section 41. To determine if you have an R&TC Section 41 reporting requirement, see the R&TC Section 41 Reporting Requirements section or get form FTB 4197.
Net Operating Loss Suspension – For taxable years beginning on or after January 1, 2024, and before January 1, 2027, California has suspended the net operating loss (NOL) carryover deduction. Taxpayers may continue to compute and carryover an NOL during the suspension period. However , taxpayers with net business income or modified adjusted gross income of less than $1,000,000 or with disaster loss carryovers are not affected by the NOL suspension rules.
The carryover period for suspended losses is extended by:
Three years for losses incurred in taxable years beginning before January 1, 2024.
Two years for losses incurred in taxable years beginning on or after January 1, 2024, and before January 1, 2025.
One year for losses incurred in taxable years beginning on or after January 1, 2025, and before January 1, 2026.
For more information, see R&TC Section 17276.24, and get form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations – Individuals, Estates, and Trusts.
Business Credit Limitation – For taxable years beginning on or after January 1, 2024, and before January 1, 2027, there is a $5,000,000 limitation on the application of business credits. The total of all business credits including the carryover of any credit for the taxable year may not reduce the “net tax” by more than $5,000,000. This limitation does not apply to the Low-Income Housing Credit or the Pass-Through Entity Elective Tax Credit. The credit for prior year Alternative Minimum Tax is not subject to the credit limitation. Business credits should be applied against “net tax” before other credits.
For each taxable year of the limitation, taxpayers may make an irrevocable election to receive an annual refundable credit amount, in future tax years, for business credits disallowed due to the $5,000,000 limitation. The election must be made annually by completing form FTB 3870, Election for Refundable Credit, and attaching it to an original, timely filed tax return.
If a taxpayer does not choose to make the election outlined above, business credits disallowed due to the limitation may be carried over. The carryover period for disallowed credits is extended by the number of taxable years the credit was not allowed.
For more information, refer to R&TC Sections 17039.4 and 17039.5 and get form FTB 3870.
Intangible Drilling and Development Costs – California law does not allow the IRC Section 263(c) deduction for intangible drilling and development costs in the case of oil and gas wells paid or incurred on or after January 1, 2024. For more information, see R&TC Section 17260 and get Schedule P (540), Alternative Minimum Tax and Credit Limitations – Residents, form FTB 3885A, Depreciation and Amortization Adjustments, and FTB Pub. 1001.
Percentage Depletion – For taxable years beginning on or after January 1, 2024, California law does not allow the calculation of depletion as a percentage of gross income from the property for specified natural resources, including coal, oil shale, oil and gas wells. R&TC Sections 17681.3 and 17681.6 allowing state nonconformity to federal rules for percentage depletion of certain refiner exclusions as well as the temporary suspension of taxable income limit for marginal production have also been repealed. For more information, see R&TC Section 17681 and get Schedule P (540), form FTB 3885A, and FTB Pub. 1001.
Enhanced Oil Recovery Credit Repeal – For taxable years beginning on or after January 1, 2024, the Enhanced Oil Recovery Credit has been repealed. Taxpayers may now only claim available carryovers. For more information, get form FTB 3540, Credit Carryover and Recapture Summary.
Postponement of Certain Tax-Related Deadlines – Beginning on or after June 27, 2024, the Director of Finance shall determine when IRC Section 7508A, related to postponement of certain federal tax-related deadlines, applies for California purposes to a taxpayer affected by a state of emergency declared by the Governor or a federally declared disaster. Impacted taxpayers can request an additional relief period if the state postponement period expires before the federal postponement period by filing form FTB 3872, California Disaster Relief Request for Postponement of Tax Deadlines. For more information, get form FTB 3872 and see R&TC Section 18572.
Special Rules for Certain Distributions from Qualified IRC Section 529 Tuition Plans – The federal Consolidated Appropriations Act (CAA), 2023, allows qualified IRC Section 529 tuition plans that have been maintained for 15 years to rollover to a Roth IRA without a tax or penalty. Under the federal law, rollover distributions from an IRC Section 529 plan to a Roth IRA after December 31, 2023, will be treated in the same manner as the earnings and contributions of a Roth IRA. California law does not conform to this federal provision. Rollover distribution from an IRC Section 529 plan to a Roth IRA is includible in California taxable income and subject to an additional tax of 2½%. For more information, see Schedule CA (540) instructions and get form FTB 3805P, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts.
Catch-Up Contributions for Certain Individuals – For taxable years beginning on or after January 1, 2024, the federal CAA, 2023, provides for the indexing for the $1,000 catch-up contribution to an IRA for individuals age 50 or older. The CAA, 2023, also increases certain contribution amounts, including catch-up contributions for individuals age 50 or over as defined in IRC Section 414(v). California law does not conform to these federal provisions. Any amount contributed that exceeds the contribution amount allowed for California may need to be included in income for California purposes. Any distribution from contributions in excess of the California limit may become taxable when distributed. For more information, see Schedule CA (540) instructions and get FTB Pub. 1005, Pension and Annuity Guidelines.
Wildfire Mitigation Payment – For taxable years beginning on or after January 1, 2024, and before January 1, 2029, California law allows a qualified taxpayer an exclusion from gross income for any amount received as a California qualified wildfire loss mitigation payment through the California Wildfire Mitigation Financial Assistance Program. For more information, see Schedule CA (540) instructions and R&TC Section 17138.8.
Voluntary Contribution – You may contribute to the following new funds:
Prevention of Animal Homelessness and Cruelty Voluntary Tax Contribution Fund
California ALS Research Network Voluntary Tax Contribution Fund
State Disability Insurance – For taxable years beginning on or after January 1, 2024, California removes the taxable wage limit and maximum withholdings for each employee subject to State Disability Insurance (SDI) contributions. All wages are taxable for the purpose of computing SDI worker contributions. As a result, the excess SDI (or VPDI) withheld line has been removed from the personal income tax return by updating the line as “reserved for future use.” For more information, go to the Employment Development Department (EDD) website at edd.ca.gov .
Taxpayers should file form FTB 4197 with the tax return to report tax expenditure items as part of the FTB’s annual reporting requirements under R&TC Section 41. "Tax expenditure" means a credit, deduction, exclusion, exemption, or any other tax benefit provided for by the state. The FTB uses information from form FTB 4197 for reports required by the California Legislature. Taxpayers that have a reporting requirement for any of the following should file form FTB 4197:
For taxable years beginning on or after January 1, 2024, and before January 1, 2029, qualified taxpayers who benefited from the exclusion from gross income for any amount received as a California qualified wildfire loss mitigation payment through the California Wildfire Mitigation Financial Assistance Program.
For taxable years beginning on or after January 1, 2020, and before January 1, 2028, qualified taxpayers who benefited from the exclusion from gross income for any qualified amount received in a settlement from Pacific Gas and Electric (PG&E) Company or its subsidiary relating to the 2019 Kincade Fire.
For taxable years beginning on or after January 1, 2020, and before January 1, 2028, qualified taxpayers who benefited from the exclusion from gross income for any qualified amount received in a settlement from PG&E Company or its subsidiary relating to the 2020 Zogg Fire.
For taxable years beginning on or after January 1, 2020, and before January 1, 2028, taxpayers who benefited from the exclusion from gross income for certain emergency financial aid grants received by a postsecondary education student.
For taxable years beginning on or after January 1, 2021, and before January 1, 2026, taxpayers who benefited from the exclusion from gross income for the amount of student loans discharged under the ARPA for the following: loans provided expressly for post-secondary educational expenses if the loans were made, insured, or guaranteed by a federal, state or local government entity, or an eligible educational institution; private education loans; loans made by certain educational institutions/organizations by tax-exempt organizations to refinance a loan.
For taxable years beginning before January 1, 2027, qualified taxpayers who benefited from the exclusion from gross income for any amount received in a settlement from Southern California Edison for claims relating to the 2017 Thomas Fire or the 2018 Woolsey Fire.
For taxable years beginning on January 1, 2022, and before January 1, 2027, taxpayers who benefited from the exclusion of gross income for any amount received as a rebate, voucher, or other financial incentive issued by a public water system, as defined, local government, or state agency for participation in a turf replacement water conservation program.
For taxable years beginning on or after January 1, 2021, taxpayers who benefited from the exclusion from gross income for the Paycheck Protection Program (PPP) loans forgiveness, other loan forgiveness, the Economic Injury Disaster Loan (EIDL) advance grant, restaurant revitalization grant, or shuttered venue operator grant, and related eligible expense deductions.
For taxable years beginning on or after January 1, 2020, and before January 1, 2030, a taxpayer operating a commercial cannabis activity that is licensed under California Medicinal and Adult-Use Cannabis Regulation and Safety Act (CA MAUCRSA).
For more information, get form FTB 4197.
Use Tax – For taxable years beginning on or after January 1, 2023, and before January 1, 2029, you may not report business purchases subject to use tax on your income tax return if you make more than $10,000 in purchases subject to use tax (excluding vehicles, vessels, and aircraft) per calendar year and have not paid use tax on those purchases to a retailer engaged in business in California or to a retailer authorized by the California Department of Tax and Fee Administration to collect the tax. For other use tax requirements, see specific line instructions for Form 540, line 91 and R&TC Section 6225.
Federal Veterans Auto and Education Improvement Act (VAEIA) of 2022 – The VAEIA was enacted on January 5, 2023, and made amendments to the federal Servicemembers Civil Relief Act (SCRA). California conforms to the following VAEIA provisions:
A spouse of a servicemember shall neither lose nor acquire a residence or domicile for purposes of taxation with respect to the person, personal property, or income of the spouse by reason of being absent or present in any tax jurisdiction of the United States solely to be with the servicemember in compliance with the servicemember's military orders.
For any taxable year of the marriage, a servicemember and the spouse of such servicemember may elect to use for purposes of taxation, regardless of the date on which the marriage of the servicemember and the spouse occurred, any of the following: The residence or domicile of the servicemember. The residence or domicile of the spouse. The permanent duty station of the servicemember.
For more information, get FTB Pub. 1032.
Federal CAA, 2023 – The CAA, 2023, was enacted on December 29, 2022, and it includes the federal Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act of 2022. In general, the R&TC conforms to the changes to the retirement provisions under the SECURE 2.0 Act. For more general information, refer to the federal act and the California R&TC.
No-cost or Low-cost Health Care Coverage Information – For taxable years beginning on or after January 1, 2023, we added a new health care coverage information question on the tax return. If you are interested in no-cost or low-cost health care coverage information, check the "Yes" box on Form 540, Side 5. See specific line instructions for Form 540, Health Care Coverage Information section.
Timeliness Penalty Abatement – For taxable years beginning on or after January 1, 2022, an individual taxpayer may elect to request a one-time abatement of a failure-to-file or failure-to-pay timeliness penalty either orally or in writing, if certain conditions are met. For more information, see specific line instructions for Form 540, Interest and Penalties section, and R&TC Section 19132.5.
Young Child Tax Credit Expansion – For taxable years beginning on or after January 1, 2022, California expanded the YCTC eligibility to include an eligible individual with a qualifying child who would otherwise have been allowed the California EITC but the individual has earned income of zero dollars or less, does not have net losses in excess of $34,602 in the current taxable year, and does not have wages, salaries, tips, and other employee compensation in excess of $34,602 in the current taxable year. For more information, get form FTB 3514, or go to ftb.ca.gov and search for yctc .
Foster Youth Tax Credit – For taxable years beginning on or after January 1, 2022, the refundable FYTC is available to an individual and/or spouse/RDP age 18 to 25, who is allowed the California EITC for the taxable year, was in foster care while 13 years of age or older and placed through the California foster care system. For the current taxable year, the maximum amount of credit allowable for each eligible taxpayer is $1,154 and the credit amount phases out as earned income exceeds the threshold amount of $26,626 and completely phases out at $31,951. For more information, see specific line instructions for Form 540, line 77, and get form FTB 3514, see R&TC Section 17052.2, or go to ftb.ca.gov and search for fytc .
Voter Registration Information – For taxable years beginning on or after January 1, 2022, we added a Voter Registration Information checkbox on the tax return. For more information, see specific line instructions for Form 540, Voter Information section.
Federal Acts – In general, the R&TC does not conform to the changes under the following federal acts. California taxpayers continue to follow the IRC as of the specified date of January 1, 2015, with modifications. For specific adjustments due to the following acts, see Schedule CA (540) instructions.
American Rescue Plan Act (ARPA) of 2021 (enacted on March 11, 2021)
Consolidated Appropriations Act (CAA), 2021 (enacted on December 27, 2020)
Coronavirus Aid, Relief, and Economic Security (CARES) Act (enacted on March 27, 2020)
Setting Every Community Up for Retirement Enhancement (SECURE) Act (enacted on December 20, 2019)
Gross Income Exclusion for Bruce’s Beach – Effective September 30, 2021, California law allows an exclusion from gross income for the first time sale in the taxable year in which the land within Manhattan State Beach, known as “Peck’s Manhattan Beach Tract Block 5” and commonly referred to as “Bruce’s Beach” is sold, transferred, or encumbered. A recipient’s gross income does not include the following:
Any sale, transfer, or encumbrance of Bruce’s Beach;
Any gain, income, or proceeds received that is directly derived from the sale, transfer, or encumbrance of Bruce’s Beach.
For more information, get Schedule D (540), California Capital Gain or Loss Adjustment.
Moving Expense Deduction – For taxable years beginning on or after January 1, 2021, taxpayers should file California form FTB 3913, Moving Expense Deduction, to claim moving expense deductions. Attach the completed form FTB 3913 to Form 540. For more information, see Schedule CA (540) instructions and get form FTB 3913.
Elective Tax for Pass-Through Entities (PTE) and Credit for Owners – For taxable years beginning on or after January 1, 2021, and before January 1, 2026, California law allows an entity taxed as a partnership or an “S” corporation to annually elect to pay an elective tax at a rate of 9.3% based on its qualified net income. The election shall be made on an original, timely filed return and is irrevocable for the taxable year.
The law allows a credit against the personal income tax to a taxpayer, other than a partnership, that is a partner, shareholder, or member of a qualified entity that elects to pay the elective tax, in an amount equal to 9.3% of the partner’s, shareholder’s, or member’s pro rata share or distributive share and guaranteed payments of qualified net income subject to the election made by the qualified entity. Generally, a disregarded business entity and its partners or members cannot receive the credit, except for a disregarded single member limited liability company (SMLLC) that is owned by an individual, fiduciary, estate, or trust subject to personal income tax. For more information, go to ftb.ca.gov and search for pte elective tax and get the following PTE elective tax forms and instructions:
Form FTB 3893, Pass-Through Entity Elective Tax Payment Voucher
Form FTB 3804, Pass-Through Entity Elective Tax Calculation
Form FTB 3804-CR, Pass-Through Entity Elective Tax Credit
Dependent Exemption Credit with No ID – For taxable years beginning on or after January 1, 2018, taxpayers claiming a dependent exemption credit for a dependent who is ineligible for a Social Security Number (SSN) and a federal Individual Taxpayer Identification Number (ITIN) may provide alternative information to the FTB to identify the dependent. For more information, get form FTB 3568, Alternative Identifying Information for the Dependent Exemption Credit.
Taxpayers may amend their tax return beginning with taxable year 2018 to claim the dependent exemption credit. If claiming a refund, taxpayers must amend their returns within the statute of limitations. For more information on how to amend your tax returns, see “ Instructions for Filing a 2024 Amended Return .”
Worker Status: Employees and Independent Contractors – Some individuals may be classified as independent contractors for federal purposes and employees for California purposes, which may also cause changes in how their income and deductions are classified. Proposition 22 was operative as of December 16, 2020, and may affect a taxpayer’s worker classification. For more information, see Schedule CA (540) instructions.
Minimum Essential Coverage Individual Mandate – For taxable years beginning on or after January 1, 2020, California law requires residents and their dependents to obtain and maintain minimum essential coverage, also referred to as qualifying health care coverage. Individuals who fail to maintain qualifying health care coverage for any month during the taxable year will be subject to a penalty unless they qualify for an exemption. For more information, see specific line instructions for Form 540, line 92, or get the following health care forms, instructions, and publications:
Form FTB 3853, Health Coverage Exemptions and Individual Shared Responsibility Penalty
Form FTB 3895, California Health Insurance Marketplace Statement
FTB Pub. 3895B, California Instructions for Filing Federal Forms 1094-B and 1095-B
FTB Pub. 3895C, California Instructions for Filing Federal Forms 1094-C and 1095-C
Small Business Accounting/Percentage of Completion Method – For taxable years beginning on or after January 1, 2019, California law generally conforms to the TCJA’s definition of small businesses as taxpayers whose average annual gross receipts over three years do not exceed a certain amount. For the current taxable year, the threshold amount is $30 million. These small businesses are exempt from the requirement of using the Percentage of Completion Method of accounting for any construction contract if the contract is estimated to be completed within two years from the date the contract was entered into. A taxpayer may elect to apply the provision regarding accounting for long term contracts to contracts entered into on or after January 1, 2018.
Native American Earned Income Exemption – For taxable years beginning on or after January 1, 2018, federally recognized tribal members living in California Indian country who earn income from any federally recognized California Indian country are exempt from California taxation. This exemption applies only to earned income. Enrolled tribal members who receive per capita income must reside in their affiliated tribe’s Indian country to qualify for tax exempt status. Additional information can be found in the instructions for Schedule CA (540) and form FTB 3504, Enrolled Tribal Member Certification.
Schedule X, California Explanation of Amended Return Changes – Use Schedule X to determine any additional amount you owe or refund due to you, and to provide reason(s) for amending your previously filed income tax return. For additional information, see “ Instructions for Filing a 2024 Amended Return .”
Improper Withholding on Severance Paid to Veterans – The federal Combat‑Injured Veterans Tax Fairness Act of 2016 gives veterans who retired from the Armed Forces for medical reasons additional time to claim a refund if they had taxes improperly withheld from their severance pay. If you filed an amended return with the IRS on this issue, you have two years to file your amended California return.
California Achieving a Better Life Experience (ABLE) Program – For taxable years beginning on or after January 1, 2016, the California Qualified ABLE Program was established and California law generally conforms to the federal income tax treatment of ABLE accounts. Additional information can be found in the instructions for form FTB 3805P, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.
Electronic Funds Withdrawal (EFW) – Make extension or estimated tax payments using tax preparation software. Check with your software provider to determine if they support EFW for extension or estimated tax payments.
Payments and Credits Applied to Use Tax – For taxable years beginning on or after January 1, 2015, if a taxpayer includes use tax on their personal income tax return, payments and credits will be applied to use tax first, then towards income tax, interest, and penalties. For more information, see specific line instructions for Form 540, line 91.
Mandatory Electronic Payments – You are required to remit all your payments electronically once you make an estimated tax or extension payment exceeding $20,000 or you file an original tax return with a total tax liability over $80,000. Once you meet this threshold, all subsequent payments regardless of amount, tax type, or taxable year must be remitted electronically. The first payment that would trigger the mandatory e-pay requirement does not have to be made electronically. Individuals that do not send the payment electronically will be subject to a 1% noncompliance penalty.
You can request a waiver from mandatory e-pay if one or more of the following is true:
You have not made an estimated tax or extension payment in excess of $20,000 during the current or previous taxable year.
Your total tax liability reported for the previous taxable year did not exceed $80,000.
The amount you paid is not representative of your total tax liability.
For more information or to obtain the waiver form, go to ftb.ca.gov/e-pay . Electronic payments can be made using Web Pay on the FTB’s website, EFW as part of the e-file return, or your credit card.
Estimated Tax Payments – Taxpayers are required to pay 30% of the required annual payment for the 1st required installment, 40% of the required annual payment for the 2nd required installment, no installment is due for the 3rd required installment, and 30% of the required annual payment for the 4th required installment.
Taxpayers with a tax liability less than $500 ($250 for married/RDP filing separately) do not need to make estimated tax payments.
Backup Withholding – With certain limited exceptions, payers that are required to withhold and remit backup withholding to the IRS are also required to withhold and remit to the FTB on income sourced to California. If the payee has backup withholding, the payee must contact the FTB to provide a valid taxpayer identification number before filing the tax return. Failure to provide a valid taxpayer identification number may result in a denial of the backup withholding credit. For more information, go to ftb.ca.gov and search for backup withholding .
Registered Domestic Partners (RDPs) – Under California law, RDPs must file their California income tax return using either the married/RDP filing jointly or married/RDP filing separately filing status. RDPs have the same legal benefits, protections, and responsibilities as married couples unless otherwise specified.
If you entered into a same sex legal union in another state, other than a marriage, and that union has been determined to be substantially equivalent to a California registered domestic partnership, you are required to file a California income tax return using either the married/RDP filing jointly or married/RDP filing separately filing status.
For purposes of California income tax, references to a spouse, husband, or wife also refer to a California RDP, unless otherwise specified. When we use the initials RDP, they refer to both a California registered domestic “partner” and a California registered domestic “partnership,” as applicable. For more information on RDPs, get FTB Pub. 737.
Direct Deposit Refund – You can request a direct deposit refund on your tax return whether you e-file or file a paper tax return. Be sure to fill in the routing and account numbers carefully and double-check the numbers for accuracy to avoid it being rejected by your bank.
Direct Deposit for ScholarShare 529 College Savings Plans – If you have a ScholarShare 529 College Savings Plan account maintained by the ScholarShare Investment Board, you may have your refund directly deposited to your ScholarShare account. Go to scholarshare529.com for instructions.
California Disclosure Obligations – If the individual was involved in a reportable transaction, including a listed transaction, the individual may have a disclosure requirement. Attach federal Form 8886, Reportable Transaction Disclosure Statement, to the back of the California tax return along with any other supporting schedules. If this is the first time the reportable transaction is disclosed on the tax return, send a duplicate copy of the federal Form 8886 to the address below. The FTB may impose penalties if the individual fails to file federal Form 8886, or fails to provide any other required information. A material advisor is required to provide a reportable transaction number to all taxpayers and material advisors for whom the material advisor acts as a material advisor.
For more information, go to ftb.ca.gov and search for disclosure obligation .
Tip : e-file and you won’t have to decide which form to use! The software will select the correct form for you.
Were you and your spouse/RDP residents during the entire year 2024?
Yes . Check the chart below to see which form to use.
No . Use Form 540NR. To download or order the California Nonresident or Part‑Year Resident Booklet, go to ftb.ca.gov/forms or see “ Where to Get Income Tax Forms and Publications .”
Form 540 2EZ Form not included in these instructions. If you qualify to use Form 540 2EZ, see “ Where To Get Income Tax Forms and Publications ” to download or order this form. Form 540 Filing Status Single, married/RDP filing jointly, head of household, qualifying surviving spouse/RDP Any filing status Dependents 0-3 allowed All dependents you are entitled to claim Amount of Income Total income of: $100,000 or less if single or head of household $200,000 or less if married/RDP filing jointly or qualifying surviving spouse/RDP You cannot use Form 540 2EZ if you (or your spouse/RDP) can be claimed as a dependent by another taxpayer, and your TOTAL income is less than or equal to $18,390 if single; $36,730 if married/RDP filing jointly or qualifying surviving spouse/RDP; or $26,030 if head of household. Any amount of income Sources of Income Only income from: Wages, salaries, and tips Taxable interest, dividends, and pensions Taxable scholarship and fellowship grants (only if reported on federal Form(s) W-2) Capital gains from mutual funds (reported on federal Form 1099-DIV, box 2a only) Unemployment compensation reported on federal Form 1099-G Paid Family Leave Insurance U.S. social security benefits Tier 1 and tier 2 railroad retirement payments All sources of income Adjustments to Income No adjustments to income All adjustments to income Standard Deduction Allowed Allowed Itemized Deductions No itemized deductions All itemized deductions Payments Only withholding shown on federal Form(s) W-2 and 1099-R Withholding from all sources Estimated tax payments Payments made with extension Tax Credits Refundable California earned income tax credit Refundable young child tax credit Refundable foster youth tax credit Personal exemption credit Senior exemption credit Up to three dependent exemption credits Nonrefundable renter’s credit All tax credits Other Taxes Only tax computed using the 540 2EZ Table All taxes
Tip :
If you qualify to use Form 540 2EZ, you may be eligible to use CalFile.
Visit ftb.ca.gov and search for calfile . It’s fast, easy, and free.
If you don’t qualify for CalFile, you qualify for e-file.
Go to ftb.ca.gov and search for efile options .
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015 , and the California Revenue and Taxation Code (R&TC).
Complete your federal income tax return Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors, before you begin your Form 540, California Resident Income Tax Return. Use information from your federal income tax return to complete your Form 540. Complete and mail Form 540 by April 15, 2025. If unable to mail your tax return by this date, see " Important Dates " at the beginning of these instructions. Also, see “ Interest and Penalties ” section for information regarding a one-time timeliness penalty abatement.
Tip : You may qualify for the federal earned income credit. See " $$$ for You " at the beginning of the booklet for more information.
Note : The lines on Form 540 are numbered with gaps in the line number sequence. For example, line 20 through line 30 do not appear on Form 540, so the line number that follows line 19 on Form 540 is line 31.
Caution : Form 540 has six sides. When filing Form 540, you must send all six sides to the Franchise Tax Board (FTB) and Side 6 must be signed.
If you need to amend your California resident income tax return, complete an amended Form 540 and check the box at the top of Form 540 indicating AMENDED return. Attach Schedule X, California Explanation of Amended Return Changes, to the amended Form 540. For specific instructions, see “ Instructions for Filing a 2024 Amended Return .”
To use our automated phone service and codes, call 800-338-0505. For the complete code list, see " Automated Phone Service ".
Use black or blue ink on the tax return you send to the FTB.
Enter your social security number(s) or individual taxpayer identification number(s) at the top of Form 540, Side 1 through Side 6.
Print numbers and CAPITAL LETTERS in the space provided. Be sure to line up dollar amounts.
If you do not have an entry for a line, leave it blank unless the instructions for a line specifically tell you to enter -0-. Do not enter a dash or the word “NONE.”
Print your first name, middle initial, last name, and street address in the spaces provided at the top of the form.
Use the Suffix field for generational name suffixes such as “SR”, “JR”, “III”, “IV”. Do not enter academic, professional, or honorary suffixes.
Use the Additional Information field for “In-Care-Of” name and other supplemental address information only.
If you have a foreign address, follow the country’s practice for entering the city, county, province, state, country, and postal code, as applicable, in the appropriate boxes. Do not abbreviate the country name.
For federal Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship), business filers, enter the numeric PBA code from federal Schedule C (Form 1040), line B.
Enter your DOBs (mm/dd/yyyy) in the spaces provided. If your filing status is married/RDP filing jointly or married/RDP filing separately, enter the DOBs in the same order as the names.
If you or your spouse/RDP filed your 2023 tax return under a different last name, write the last name only from the 2023 tax return.
Enter your SSN in the spaces provided. If filing a joint tax return, enter the SSNs in the same order as the names.
If you do not have an SSN because you are a nonresident or resident alien for federal tax purposes, and the Internal Revenue Service (IRS) issued you an ITIN, enter the ITIN in the space for the SSN. An ITIN is a tax processing number issued by the IRS to foreign nationals and others who have a federal tax filing requirement and do not qualify for an SSN. It is a nine-digit number that always starts with the number 9.
If you are under 18 years old or have not filed a California resident income tax return in the prior year, then leave the county and principal/physical address fields blank.
Only complete this section if you are age 18 or older and you have filed a California resident income tax return in the prior year.
County – Enter the county where you have your principal/physical residence on the date that you file your Form 540. If you reside in a foreign country at the time of filing, leave the county field blank.
If your principal/physical residence address at the time of filing is the same as the address you provided at the top of this form, check the box provided on this line.
If your principal/physical residence address at the time of filing is different from the address at the top of this form, provide the address of your principal/physical residence in the spaces provided.
If you reside in a foreign country at the time of filing, enter the city, province or state, and country in the city field. Follow the country’s practice for entering the postal code. Do not abbreviate the country name.
Check only one box for line 1 through line 5. Enter the required additional information if you checked the box on line 3 or line 5. See filing status requirements .
Usually, your California filing status must be the same as the filing status you used on your federal income tax return.
Exception for Married Taxpayers Who File a Joint Federal Income Tax Return – You may file separate California returns if either spouse was either of the following:
An active member of the United States Armed Forces or any auxiliary military branch during 2024.
A nonresident for the entire year and had no income from California sources during 2024. Caution – Community Property States : If either spouse earned California source income while domiciled in a community property state, the community income will be split equally between the spouses. Both spouses will have California source income and they will not qualify for the nonresident spouse exception. For more information, get FTB Pub. 1031, Guidelines for Determining Resident Status.
If you had no federal filing requirement, use the same filing status for California you would have used to file a federal income tax return.
Registered domestic partners (RDPs) who file single for federal must file married/RDP filing jointly or married/RDP filing separately for California. If you are an RDP and file head of household for federal purposes, you may file head of household for California purposes only if you meet the requirements to be considered unmarried or considered not in a domestic partnership.
If you filed a joint tax return and either you or your spouse/RDP was a nonresident for 2024, you must file Form 540NR, California Nonresident or Part-Year Resident Income Tax Return.
Automated Phone code: 601
Check the box on line 6 if someone else can claim you or your spouse/RDP as a dependent on their tax return, even if they chose not to.
If you are married or in an RDP and file a joint return, you can be claimed as a dependent on someone else's return if you file the joint return only to claim a refund of withheld income tax or estimated tax paid.
Did you check the box on line 6?
Single or married/RDP filing separately, enter -0-.
Head of household, enter -0-.
Married/RDP filing jointly and both you and your spouse/RDP can be claimed as dependents, enter -0-.
Married/RDP filing jointly and only one spouse/RDP can be claimed as a dependent, enter 1.
Do not claim this credit if someone else can claim you as a dependent on their tax return.
The first year you claim this exemption credit, attach a doctor’s statement to the back of Form 540 indicating you or your spouse/RDP are visually impaired. If you e-file, attach any requested forms, schedules, and documents according to your software’s instructions. Visually impaired means not capable of seeing better than 20/200 while wearing glasses or contact lenses, or if your field of vision is not more than 20 degrees.
Do not claim this credit if someone else can claim you as a dependent on their tax return.
If you were 65 years of age or older by December 31, 2024*, you should claim an additional exemption credit on line 9. If you are married/or an RDP, each spouse/RDP 65 years of age or older should claim an additional credit. You may contribute all or part of this credit to the California Seniors Special Fund. See “ Voluntary Contribution Fund Descriptions ” for more information.
*If your 65th birthday is on January 1, 2025, you are considered to be age 65 on December 31, 2024.
Do not claim this credit if someone else can claim you as a dependent on their tax return.
To claim an exemption credit for each of your dependents, you must write each dependent’s first and last name, SSN or ITIN, and relationship to you in the space provided. If you are claiming more than three dependents, attach a statement with the required dependent information to your tax return. The persons you list as dependents must be the same persons you listed as dependents on your federal income tax return. If you filed form FTB 3568, Alternative Identifying Information for the Dependent Exemption Credit, to qualify to claim your dependents for California purposes, the dependents you claim on your California income tax return may not match those claimed on your federal income tax return. Count the number of dependents listed and enter the total in the box on line 10. Multiply the number you entered by the pre-printed dollar amount and enter the result.
For taxable years beginning on or after January 1, 2018, taxpayers claiming a dependent exemption credit for a dependent who is ineligible for an SSN and a federal ITIN may provide alternative information to the FTB to identify the dependent.
To claim the dependent exemption credit, taxpayers complete form FTB 3568, attach the form and required documentation to their tax return, and write “no id” in the SSN field of line 10, Dependents, on Form 540. For each dependent being claimed that does not have an SSN and an ITIN, a form FTB 3568 must be provided along with supporting documentation. If you e-file, attach any requested forms, schedules, and documents according to your software’s instructions.
Taxpayers may amend their tax returns beginning with taxable year 2018 to claim the dependent exemption credit. These taxpayers should complete an amended Form 540, write “no id” in the SSN field on the Dependents line, and attach Schedule X. To complete Schedule X, check box m for “Other” on Part II, line 1, and write the explanation "Claim dependent exemption credit with no id and form FTB 3568 is attached" on Part II, line 2. Make sure to attach form FTB 3568 and the required supporting documents in addition to the amended tax return and Schedule X. If taxpayers do not claim the dependent exemption credit on their original 2024 tax return, they may amend their 2024 tax return following the same procedures used to amend their previous year amended tax returns beginning with taxable year 2018. If claiming a refund, taxpayers must amend their returns within the statute of limitations. For more information, get FTB Notice 2021-01.
If your dependent child was born and died in 2024 and you do not have an SSN or an ITIN for the child, write “Died” in the space provided for the SSN and include a copy of the child’s birth certificate, death certificate, or hospital records. The document must show the child was born alive. If you e-file, attach any requested forms, schedules, and documents according to your software’s instructions.
Add line 7 through line 10 and enter the total dollar amount of all exemptions for personal, blind, senior, and dependent.
Refer to your completed federal income tax return to complete this section.
Automated Phone code: 204
Enter the total amount of your state wages from all states from each of your federal Form(s) W-2, Wage and Tax Statement. This amount appears on federal Form W-2, box 16.
If you received wages and do not have a federal Form W-2, see “ Filing Your Tax Return .”
RDPs who file a California tax return as married/RDP filing jointly and have no RDP adjustments between federal and California, combine their individual AGIs from their federal tax returns filed with the IRS. Enter the combined AGI on line 13.
RDP adjustments include but are not limited to the following:
Transfer of property between spouses/RDPs
Capital loss
Transactions between spouses/RDPs
Sale of residence
Dependent care assistance
Investment interest
Qualified residence interest acquisition loan & equity loan
Expense depreciation property limits
Individual Retirement Account
Interest education loan
Rental real estate passive loss
Rollover of publicly traded securities gain into specialized small business investment companies
RDPs filing as married/RDP filing separately, former RDPs filing single, and RDPs with RDP adjustments will use the California RDP Adjustments Worksheet in FTB Pub. 737, Tax Information for Registered Domestic Partners, or complete a federal pro forma Form 1040 or 1040-SR. Transfer the amount from the California RDP Adjustments Worksheet, line 27, column D, or federal pro forma Form 1040 or 1040-SR, line 11, to Form 540, line 13.
If there are no differences between your federal and California income or deductions, do not file Schedule CA (540), California Adjustments – Residents.
If there are differences between your federal and California income, e.g., social security benefits, complete Schedule CA (540). Follow the instructions for Schedule CA (540). Enter on line 14 the amount from Schedule CA (540), Part I, line 27, column B. If a negative amount, see Schedule CA (540), Part I, line 27 instructions.
Subtract the amount on line 14 from the amount on line 13. Enter the result on line 15. If the amount on line 13 is less than zero, combine the amounts on line 13 and line 14 and enter the result in parentheses. For example: “(12,325).”
If there are differences between your federal and California deductions, complete Schedule CA (540). Follow the instructions for Schedule CA (540). Enter on line 16 the amount from Schedule CA (540), Part I, line 27, column C. If a negative amount, see Schedule CA (540), Part I, line 27 instructions.
Decide whether to itemize your charitable contributions, medical expenses, mortgage interest paid, taxes, etc., or take the standard deduction. Your California income tax will be less if you take the larger of:
Your California itemized deductions.
Your California standard deduction.
California itemized deductions may be limited based on federal AGI. To compute limitations, use Schedule CA (540). RDPs, use your recalculated federal AGI to figure your itemized deductions.
On federal tax returns, individual taxpayers who claim the standard deduction are allowed an additional deduction for net disaster losses. For California, deductions for disaster losses are only allowed for those individual taxpayers who itemized their deductions.
If married/or an RDP and filing separate tax returns, you and your spouse/RDP must either both itemize your deductions (even if the itemized deductions of one spouse/RDP are less than the standard deduction) or both take the standard deduction.
If someone else can claim you as a dependent, you may claim the greater of the standard deduction or your itemized deductions. To figure your standard deduction, use the California Standard Deduction Worksheet for Dependents.
Itemized deductions – Figure your California itemized deductions by completing Schedule CA (540), Part II, line 1 through line 30. Enter the result on Form 540, line 18.
If you did not itemize deductions on your federal income tax return but will itemize deductions for your Form 540, first complete federal Schedule A (Form 1040), Itemized Deductions. Then check the box on Side 5, Part II of the Schedule CA (540) and complete Part II. Attach both the federal Schedule A (Form 1040) and California Schedule CA (540) to the back of your tax return.
Standard deduction – Find your standard deduction on the California Standard Deduction Chart for Most People. If you checked the box on Form 540, line 6, use the California Standard Deduction Worksheet for Dependents.
Do not use this chart if your parent, or someone else, can claim you (or your spouse/RDP) as a dependent on their tax return.
Your Filing Status Enter On Line 18 1 – Single $5,540 2 – Married/RDP filing jointly $11,080 3 – Married/RDP filing separately $5,540 4 – Head of household $11,080 5 – Qualifying surviving spouse/RDP $11,080
The California standard deduction amounts are less than the federal standard deduction amounts.
Use this worksheet only if your parent, or someone else, can claim you (or your spouse/RDP) as a dependent on their return. Use whole dollars only.
Enter your earned income from line 2 of the “Standard Deduction Worksheet for Dependents" in the instructions for federal Form 1040 or 1040-SR.
Minimum standard deduction: $1,300.00.
Enter the larger of line 1 or line 2 here.
Enter the amount shown for your filing status: Single or married/RDP filing separately, enter $5,540. Married/RDP filing jointly, head of household, or qualifying surviving spouse/RDP, enter $11,080.
Standard deduction . Enter the smaller of line 3 or line 4 here and on Form 540, line 18.
Capital Construction Fund (CCF) – If you claim a deduction on your federal Form 1040 or 1040-SR, line 15 for the contribution made to a CCF set up under the federal Merchant Marine Act of 1936, reduce the amount you would otherwise enter on line 19 by the amount of the deduction. Next to line 19, write “CCF” and the amount of the deduction. For more information, get federal Pub. 595, Capital Construction Fund for Commercial Fishermen.
When figuring your tax, use the correct filing status and taxable income amount.
To figure your tax, use one or more of the following methods and check the matching box(es) on line 31, as applicable:
Tax Table – If your taxable income on line 19 is $100,000 or less, use the tax table . Use the correct filing status column in the tax table.
Tax Rate Schedules – If your taxable income on line 19 is over $100,000, use the tax rate schedule for your filing status.
FTB 3800 – Generally, use form FTB 3800, Tax Computation for Certain Children with Unearned Income, to figure the tax on a separate Form 540 for your child who was age 18 and under or a full-time student under age 24 on January 1, 2025, and who had more than $2,600 of investment income. Attach form FTB 3800 to the child’s Form 540.
FTB 3803 – If, as a parent, you elect to report your child’s interest and dividend income of more than $1,300 but less than $13,000 on your tax return, complete form FTB 3803, Parents’ Election to Report Child’s Interest and Dividends. File a separate form FTB 3803 for each child whose income you elect to include on your Form 540. Add the amount of tax, if any, from each form FTB 3803, line 9, to the amount of your tax from the tax table or tax rate schedules and enter the result on Form 540, line 31. Attach form(s) FTB 3803 to your tax return.
To prevent possible delays in processing your tax return or refund, enter the correct tax amount on this line. To automatically figure your tax or to verify your tax calculation, use our online tax calculator. Go to ftb.ca.gov/tax-rates .
Tip : CalFile or e-file and you won’t have to do the math. Go to ftb.ca.gov and search for efile .
Exemption credits reduce your tax. If your federal AGI on line 13 is more than the amount shown below for your filing status, your credits will be limited.
For purposes of computing limitations based upon AGI, RDPs recalculate their AGI using a federal pro forma Form 1040 or Form 1040-SR, or California RDP Adjustments Worksheet (located in FTB Pub. 737). If your recalculated federal AGI is more than the amount shown below for your filing status, your credits will be limited.
If your filing status is: Is Form 540, line 13 more than: Single or married/RDP filing separately $244,857 Married/RDP filing jointly or qualifying surviving spouse/RDP $489,719 Head of household $367,291
Use whole dollars only .
Enter the amount from Form 540, line 13.
Enter the amount for your filing status on line b: Single or married/RDP filing separately: $244,857 Married/RDP filing jointly or qualifying surviving spouse/RDP: $489,719 Head of household: $367,291
Subtract line b from line a.
Divide line c by $2,500 ($1,250 if married/RDP filing separately). If the result is not a whole number, round it to the next higher whole number.
Multiply line d by $6.
Add the numbers from the boxes on Form 540, lines 7, 8, and 9 (not the dollar amounts).
Multiply line e by line f.
Add the total dollar amount from Form 540, lines 7, 8, and 9.
Subtract line g from line h. If zero or less, enter -0-.
Enter the number from the box on Form 540, line 10 (not the dollar amount).
Multiply line e by line j.
Enter the dollar amount from Form 540, line 10.
Subtract line k from line l. If zero or less, enter -0-.
Add line i and line m. Enter the result here and on Form 540, line 32.
If you received a qualified lump-sum distribution in 2024 and you were born before January 2, 1936, get California Schedule G-1, Tax on Lump-Sum Distributions, to figure your tax by special methods that may result in less tax. Attach Schedule G-1 to your tax return.
If you received accumulation distributions from foreign trusts or from certain domestic trusts, get form FTB 5870A, Tax on Accumulation Distribution of Trusts, to figure the additional tax. Attach form FTB 5870A to your tax return.
To get these forms, see “ Order Forms and Publications .”
A variety of California tax credits are available to reduce your tax if you qualify. To figure and claim most special credits, you must complete a separate form or schedule and attach it to your Form 540. The Credit Chart included in these instructions describes the credits and provides the name, credit code, and number of the required form or schedule. Many credits are limited to a certain percentage or a certain dollar amount. In addition, the total amount you may claim for all credits is limited by tentative minimum tax (TMT); go to Box A to see if your credits are limited.
If you are not claiming any special credits, go to line 40 and line 46 to see if you qualify for the Nonrefundable Child and Dependent Care Expenses Credit or the Nonrefundable Renter’s Credit.
Did you complete federal Schedule C, D, E, or F and claim or receive any of the following ( Note : If your business gross receipts are less than $1,000,000 from all trades or businesses, you do not have to report alternative minimum tax (AMT). For more information, see line 61 instructions.):
Accelerated depreciation in excess of straight-line
Intangible drilling costs
Depletion
Circulation expenditures
Research and experimental expenditures
Mining exploration/development costs
Amortization of pollution control facilities
Income/loss from tax shelter farm activities
Income/loss from passive activities
Income from long-term contracts using the percentage of completion method
Pass-through AMT adjustment from an estate or trust reported on Schedule K-1 (541), Beneficiary’s Share of Income, Deductions, Credits, etc.
Did you claim or receive any of the following:
Investment interest expense
Income from incentive stock options in excess of the amount reported on your tax return
Income from installment sales of certain property
If your filing status is: Is Form 540, line 17 more than: Single or head of household $337,678 Married/RDP filing jointly or qualifying surviving spouse/RDP $450,238 Married/RDP filing separately $225,115
Claim this credit if you paid someone to care for your qualifying child under the age of 13, other dependent who is physically or mentally incapable of caring for him or herself, or spouse/RDP if physically or mentally incapable of caring for him or herself. The care must be provided in California. To claim this credit, your federal AGI must be $100,000 or less and you must complete and attach form FTB 3506, Child and Dependent Care Expenses Credit.
A code identifies each credit. To claim only one or two credits, enter the credit name, code, and amount of the credit on line 43 and line 44.
To claim more than two credits, use Schedule P (540), Part III. Get Schedule P (540) instructions, “How to Claim Your Credits.”
Important : Attach Schedule P (540) and any supporting schedules or statements to your Form 540.
Carryovers : If you claim a credit with carryover provisions and the amount of the credit available this year exceeds your tax, carry over any excess credit to future years until the credit is used (unless the carryover period is a fixed number of years). If you claim a credit carryover for an expired credit, use form FTB 3540, Credit Carryover and Recapture Summary, to figure the amount of the credit. Otherwise, enter the amount of the credit on Schedule P (540), Part III, and do not attach form FTB 3540.
You may not claim this credit if you used the married/RDP filing jointly, head of household, or qualifying surviving spouse/RDP filing status.
Claim the credit if unmarried and not an RDP at the end of 2024 (or if married/or an RDP, you lived apart from your spouse/RDP for all of 2024 and you used the married/RDP filing separately filing status); and if you furnished more than one-half the household expenses for your home that also served as the main home of your child, step-child, or grandchild for at least 146 days but not more than 219 days of the taxable year. If the child is married/or an RDP, you must be entitled to claim a dependent exemption credit for the child.
Also, the custody arrangement for the child must be part of a decree of dissolution or legal separation or part of a written agreement between the parents where the proceedings have been initiated, but a decree of dissolution or legal separation has not yet been issued.
Use the worksheet below to figure the Joint Custody Head of Household credit using whole dollars only .
Enter the amount from Form 540, line 35.
Credit percentage – 30%: .30
Credit amount. Multiply line 1 by line 2. Enter the result or $592, whichever is less.
If you qualify for the Credit for Joint Custody Head of Household and the Credit for Dependent Parent, claim only one credit. Select the credit that allows the maximum benefit.
You may not claim this credit if you used the single, head of household, qualifying surviving spouse/RDP, or married/RDP filing jointly filing status.
Claim this credit only if all of the following apply:
You were married/or an RDP at the end of 2024 and you used the married/RDP filing separately filing status.
Your spouse/RDP was not a member of your household during the last six months of the year.
You furnished over one-half the household expenses for your dependent mother’s or father’s home, whether or not she or he lived in your home.
To figure the amount of this credit, use the worksheet for the Credit for Joint Custody Head of Household within this line instructions. If you qualify for the Credit for Joint Custody Head of Household and the Credit for Dependent Parent, claim only one. Select the credit that will allow the maximum benefit.
You may claim this credit if you:
Were 65 years of age or older on December 31, 2024*.
Qualified as a head of household in 2022 or 2023 by providing a household for a qualifying individual who died during 2022 or 2023.
Did not have AGI over $95,779 for 2024.
*If your 65th birthday is on January 1, 2025, you are considered to be age 65 on December 31, 2024.
If you meet all the conditions listed for this credit, you do not need to qualify to use the head of household filing status for 2024 in order to claim this credit.
Use this worksheet to figure this credit using whole dollars only .
Enter the amount from Form 540, line 19.
Credit percentage – 2%: .02
Credit amount. Multiply line 1 by line 2. Enter the result or $1,806, whichever is less.
For the year in which an adoption decree or an order of adoption is entered (e.g., adoption is final), claim a credit for 50% of the cost of adopting a child who was both :
A citizen or legal resident of the United States.
In the custody of a California public agency or a California political subdivision.
Treat a prior unsuccessful attempt to adopt a child (even when the costs were incurred in a prior year) and a later successful adoption of a different child as one effort when computing the cost of adopting the child. Include the following costs if directly related to the adoption process:
Fees for Department of Social Services or a licensed adoption agency.
Medical expenses not reimbursed by insurance.
Travel expenses for the adoptive family.
Note :
This credit does not apply when a child is adopted from another country or another state, or was not in the custody of a California public agency or a California political subdivision.
Any deduction for the expenses used to claim this credit must be reduced by the amount of the child adoption costs credit claimed.
Use the worksheet below to figure this credit using whole dollars only . If more than one adoption qualifies for this credit, complete a separate worksheet for each adoption. The maximum credit allowable is limited to $2,500 per minor child. Carry over the excess credit to future years until the credit is used.
Enter qualifying costs for the child.
Credit percentage – 50%: .50
Credit amount. Multiply line 1 by line 2. Do not enter more than $2,500.
If you paid rent for at least six months in 2024 on your principal residence located in California you may qualify to claim the nonrefundable renter’s credit which may reduce your tax. Complete the Nonrefundable Renter’s Credit Qualification Record included in these instructions.
Subtract the amount on line 47 from the amount on line 35. Enter the result on line 48. If the amount on line 47 is more than the amount on line 35, enter -0-.
Attach the specific form or statement required for each item below.
If you claim certain types of deductions, exclusions, and credits, you may owe AMT if your total income is more than:
$120,065 married/RDP filing jointly or qualifying surviving spouse/RDP
$90,048 single or head of household
$60,029 married/RDP filing separately
A child under age 19 or a full-time student under age 24 may owe AMT if the sum of the amount on line 19 (taxable income) and any preference items listed on Schedule P (540) and included on the return is more than the sum of $9,450 and the child’s earned income.
AMT income does not include income, adjustments, and items of tax preference related to any trade or business of a qualified taxpayer who has gross receipts, less returns and allowances, during the taxable year of less than $1,000,000 from all trades or businesses.
Get Schedule P (540) for more information. See “ Order Forms and Publications .”
If your taxable income is more than $1,000,000, compute the Mental Health Services Tax using whole dollars only :
Taxable income from Form 540, line 19.
Less: $(1,000,000)
Subtotal
Tax rate – 1%: .01
Mental Health Services Tax – Multiply line 3 by line 4. Enter this amount here and on line 62.
If you received an early distribution of a qualified retirement plan and were required to report additional tax on your federal tax return, you may also be required to report additional tax on your California tax return. Get form FTB 3805P, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts. If required to report additional tax, report it on line 63 and write “FTB 3805P” to the left of the amount.
In general, California conforms to federal law for income received under IRC Section 409A on a nonqualified deferred compensation (NQDC) plan and discounted stock options and stock appreciation rights. Income received under IRC Section 409A is subject to an additional 5% tax of the amount required to be included in income plus interest. Include the additional tax, if any, on line 63. Write “NQDC” on the dotted line to the left of the amount.
If you owe interest on deferred tax from installment obligations, include the additional tax, if any, in the amount you enter on line 63. Write “IRC Section 453A interest” and the amount on the dotted line to the left of the amount on line 63.
If you used form(s):
FTB 3531, California Competes Tax Credit – Enter only the recaptured amount used. Get the instructions for form FTB 3531, Part III, Credit Recapture, for more information.
FTB 3540, Credit Carryover and Recapture Summary
FTB 3554, New Employment Credit
FTB 3835, State Historic Rehabilitation Tax Credit
Include the additional tax for credit recapture, if any, on line 63. Write the form number and the amount on the dotted line to the left of the amount on line 63.
To avoid a delay in the processing of your tax return, enter the correct amounts on line 71 through line 73.
Enter the total California income tax withheld from your federal Forms:
W-2, Wage and Tax Statement, box 17
W-2G, Certain Gambling Winnings, box 15
1099-DIV, Dividends and Distributions, box 16
1099-INT, Interest Income, box 17
1099-K, Payment Card and Third Party Network Transactions, box 8
1099-MISC, Miscellaneous Information, box 16
1099-NEC, Nonemployee Compensation, box 5
1099-OID, Original Issue Discount, box 14
1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., box 14
Do not include city, local, or county tax withheld, tax withheld by other states, or nonconsenting nonresident (NCNR) member’s tax from Schedule K-1 (568), Member's Share of Income, Deductions, Credits, etc., line 15e. Do not include withholding from Form 592-B, Resident and Nonresident Withholding Tax Statement, or Form 593, Real Estate Withholding Statement, on this line. For more details, see instructions for line 73.
Generally, tax should not be withheld on federal Form 1099-MISC or Form 1099-NEC. If you want to pre-pay tax on income reported on federal Form 1099-MISC or Form 1099-NEC, use Form 540-ES, Estimated Tax for Individuals.
Enter the total of any:
California estimated tax payments you made using 2024 Form 540-ES, electronic funds withdrawal, Web Pay, or credit card.
Overpayment from your 2023 California income tax return that you applied to your 2024 estimated tax.
Payment you sent with form FTB 3519, Payment for Automatic Extension for Individuals.
California estimated tax payments made on your behalf by an estate, trust, or S corporation on Schedule K-1 (541) or Schedule K-1 (100S), Shareholder’s Share of Income, Deductions, Credits, etc.
Tip : To view payments made or get your current account balance, go to ftb.ca.gov and login or register for MyFTB.
If you and your spouse/RDP paid joint estimated taxes but are now filing separate income tax returns, either of you may claim the entire amount paid, or each may claim part of the joint estimated tax payments. If you want the estimated tax payments to be divided, notify the FTB before you file the tax returns so the payments can be applied to the proper account. The FTB will accept in writing, any divorce agreement (or court-ordered settlement) or a statement showing the allocation of the payments along with a notarized signature of both taxpayers.
Send statements to:
If you or your spouse/RDP made separate estimated tax payments, but are now filing a joint income tax return, add the amounts you each paid. Attach a statement to the front of Form 540 explaining that payments were made under both SSNs. If you e-file, attach any requested forms, schedules, and documents according to your software’s instructions.
You do not have to make estimated tax payments if you are a nonresident or new resident of California in 2025 and did not have a California tax liability in 2024.
Enter the total of California withholding from Forms 592-B and 593. Attach a copy of Forms 592-B and 593 to the lower front of Form 540, Side 1.
If your filing status changed after escrow closed and before filing your California tax return, contact us at 888-792-4900 prior to filing your California tax return for instructions on how to claim your withholding credit.
Caution : Do not include withholding from federal Form W-2, W-2G, or 1099, or NCNR member’s tax from Schedule K-1 (568), line 15e on this line.
Enter your Earned Income Tax Credit from form FTB 3514, California Earned Income Tax Credit, line 20.
Enter your Young Child Tax Credit from form FTB 3514, line 28.
Enter your Foster Youth Tax Credit from form FTB 3514, line 39.
For the Claim of Right credit, follow the reporting instructions in Schedule CA (540), Part II, line 16 under the Claim of Right.
Claim of Right : If you are claiming the tax credit on your California tax return, include the amount of the credit in the total for this line. Write in “IRC 1341” and the amount of the credit to the left of the amount column.
To determine if you are entitled to this credit, refer to your prior year California Form 540 or Schedule CA (540) to verify the amount was included in your California taxable income. If the amount repaid under a “Claim of Right” was not originally taxed by California, you are not entitled to claim the credit.
You are required to enter a number on this line. If the amount due is zero, you must check the applicable box to indicate that you either owe no use tax, or you paid your use tax obligation directly to the California Department of Tax and Fee Administration.
You may owe use tax if you made purchases from out-of-state retailers (for example, purchases made by telephone, online, by mail, or in person) where California sales or use tax was not paid and you used those items in California.
If you have questions about whether a purchase is taxable, go to the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov , or call its Customer Service Center at 1-800-400-7115 (TTY:711) (for hearing and speech disabilities).
Some taxpayers are required to report business purchases subject to use tax directly to the California Department of Tax and Fee Administration. However, they may report certain personal purchases subject to use tax on the FTB income tax return.
You may not report business purchases subject to use tax on your income tax return if you:
Have or are required to hold a California seller’s permit.
Make more than $10,000 in purchases subject to use tax (excluding vehicles, vessels, and aircraft) per calendar year and have not paid use tax on those purchases to a retailer engaged in business in California or to a retailer authorized by the California Department of Tax and Fee Administration to collect the tax.
Are otherwise registered or required to be registered with the California Department of Tax and Fee Administration to report use tax.
Note : You may not report use tax on your income tax return for certain types of transactions. These types of transactions are described in the instructions in Use Tax Worksheet section.
The Use Tax Worksheet and Estimated Use Tax Lookup Table will help you determine how much use tax to report. If you owe use tax but you do not report it on your income tax return, you must report and pay the tax to the California Department of Tax and Fee Administration. For information on how to report use tax directly to the California Department of Tax and Fee Administration, go to their website at cdtfa.ca.gov and type “ Find Information About Use Tax ” in the search bar.
Failure to report and pay timely may result in the assessment of interest, penalties, and fees.
See general explanation of California use tax .
You must use the Use Tax Worksheet to calculate your use tax liability, if any of these apply:
You prefer to calculate the amount of use tax due based upon your actual purchases subject to use tax, rather than based on an estimate.
You owe use tax on any item purchased for use in a trade or business and you are not registered or required to be registered with the California Department of Tax and Fee Administration to report sales or use tax.
You owe use tax on purchases of individual items with a purchase price of $1,000 or more each.
Example 1 : You purchased a television for $2,000 from an out-of-state retailer that did not collect tax. You must use the Use Tax Worksheet to calculate the tax due on the price of the television, since the price of the television is $1,000 or more.
Example 2 : You purchased a computer monitor for $300, a rare coin for $500, and designer clothing for $250 from out-of-state retailers that did not collect tax. Although the total price of all the items is $1,050, the price of each item is less than $1,000. Since none of these individual items are $1,000 or more, you are not required to use the Use Tax Worksheet and may choose to use the Estimated Use Tax Lookup Table .
If you have a combination of individual non-business items purchased for $1,000 or more each, and/or items purchased for use in a trade or business in addition to individual, non-business items purchased for less than $1,000, you may either:
Use the Use Tax Worksheet to compute use tax due on all purchases, or
Use the Use Tax Worksheet to compute use tax due on all individual items purchased for $1,000 or more plus all items purchased for use in a trade or business.
Use the Estimated Use Tax Lookup Table to estimate the use tax due on individual, non-business items purchased for less than $1,000, then add the amounts and report the total use tax on Line 91.
Example 3 : The total price of the items you purchased from out-of-state retailers that did not collect use tax is $2,300, which includes a $1,000 television, a $900 painting, and a $400 table for your living room.
You may choose to calculate the use tax due on the total price of $2,300 using the Use Tax Worksheet , or
You may choose to calculate the use tax due on the $1,000 price of the television using the Use Tax Worksheet and estimate your use tax liability for the painting and table by using the Estimated Use Tax Lookup Table , then add the amounts and report the total use tax on Line 91.
Use whole dollars only
Enter purchases from out-of-state sellers made without payment of California sales/use tax. If you choose to estimate the use tax due on individual, non-business items purchased for less than $1,000 each, only enter purchases of items with a purchase price of $1,000 or more plus items purchased for use in a trade or business not registered with the California Department of Tax and Fee Administration.
Enter the applicable sales and use tax rate.
Multiply Line 1 by the tax rate on Line 2. Enter result here.
If you choose to estimate the use tax due on individual, non-business items purchased for less than $1,000 each, enter the use tax amount due from the Estimated Use Tax Lookup Table . If all of your purchases are included in Line 1, enter -0-.
Add Lines 3 and 4. This is your total use tax.
Enter any sales or use tax you paid to another state for purchases included on Line 1. See worksheet instructions below.
Subtract Line 6 from Line 5. This is the total use tax due. Enter the amount due on Line 91. If the amount is less than zero, enter -0-.
Report purchases of items that would have been subject to sales tax if purchased from a California retailer unless your receipt shows that California tax was paid directly to the retailer. For example, generally, you would include purchases of clothing, but not exempt purchases of food products or prescription medicine. For more information on nontaxable and exempt purchases, you may visit the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov .
Include handling charges.
Do not include any other state’s sales or use tax paid on the purchases.
Enter only purchases made during the year that corresponds with the tax return you are filing.
If you traveled to a foreign country and hand-carried items back to California, generally use tax is due on the purchase price of the goods you listed on your U.S. Customs Declaration less an $800 per-person exemption. For the hand carried items, you should report the amount of purchases in excess of the $800 per-person exemption. This $800 exemption does not apply to goods sent or shipped to California by mail or other common carrier. For goods sent or shipped, you should report the entire amount of the purchases.
If your filing status is “married/RDP filing separately,” you may elect to report one-half of the use tax due or the entire amount on your income tax return. If you elect to report one-half, your spouse/RDP may report the remaining half on his or her income tax return or on the individual use tax return available from the California Department of Tax and Fee Administration.
Note : You cannot report the following types of purchases on your income tax return.
Vehicles, vessels, and trailers that must be registered with the Department of Motor Vehicles.
Mobile homes or commercial coaches that must be registered annually as required by the Health and Safety Code.
Vessels documented with the U.S. Coast Guard.
Aircraft.
Rental receipts from leasing machinery, equipment, vehicles, and other tangible personal property to your customers.
Cigarettes and tobacco products when the purchaser is registered with the California Department of Tax and Fee Administration as a cigarette and/or tobacco products consumer.
Enter the sales and use tax rate applicable to the place in California where the property was used, stored, consumed, or given away. To find your sales and use tax rate, please go to the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov and type “ City and County Sales and Use Tax Rates ” in the search bar. You may also call their Customer Service Center at 800-400-7115 (TTY:711) (for hearing and speech disabilities).
This is a credit for tax paid to other states on purchases reported on Line 1. You cannot claim a credit for more than the amount of use tax that is imposed on your use of property in this state. For example, if you paid $8.00 sales tax to another state for a purchase, and would have paid $6.00 in California, you can claim a credit of only $6.00 for that purchase.
You may use the Estimated Use Tax Lookup Table below to estimate and report the use tax due on individual non-business items you purchased for less than $1,000 each. This option is only available if you are permitted to report use tax on your income tax return and you are not required to use the Use Tax Worksheet to calculate the use tax owed on all your purchases. Simply include the use tax liability that corresponds to your California Adjusted Gross Income (found on Line 17) and enter it on Line 91. You will not be assessed additional use tax on the individual non business items you purchased for less than $1,000 each.
You may not use the Estimated Use Tax Lookup Table to estimate and report the use tax due on purchases of items for use in your business or on purchases of individual non-business items you purchased for $1,000 or more each. See the instructions for the Use Tax Worksheet if you have a combination of purchases of individual non-business items for less than $1,000 each and purchases of individual non-business items for $1,000 or more.
Adjusted Gross Income (AGI) Range Use Tax Liability Less Than $10,000 $0 $10,000 to $19,999 $1 $20,000 to $29,999 $2 $30,000 to $39,999 $3 $40,000 to $49,999 $4 $50,000 to $59,999 $5 $60,000 to $69,999 $6 $70,000 to $79,999 $7 $80,000 to $89,999 $8 $90,000 to $99,999 $9 $100,000 to $124,999 $10 $125,000 to $149,999 $12 $150,000 to $174,999 $15 $175,000 to $199,999 $17 More than $199,999 Multiply AGI by 0.009% (x 0.00009)
Enter your use tax liability on Line 4 of the worksheet, or if you are not required to use the worksheet, enter the amount on Line 91 of your income tax return.
Check the box on line 92 if you, your spouse/RDP (if filing a joint return), and anyone you can or do claim as a dependent had minimum essential coverage (also referred to as qualifying health care coverage) that covered all of 2024. Medicare Part A or C qualifies as minimum essential coverage. If you check the box on line 92, you do not owe the individual shared responsibility penalty and do not need to file form FTB 3853. For more information, get form FTB 3853.
If you and your household did not have full-year health care coverage, then go to form FTB 3853 to determine if you have an individual shared responsibility penalty. Enter your individual shared responsibility penalty from form FTB 3853, Part IV, line 1.
To avoid delay in processing of your tax return, enter the correct amounts on line 97 through line 100.
If you received a refund for 2023, you may receive a federal Form 1099-G. The refund amount reported on your federal Form 1099-G will be different from the amount shown on your tax return if you claimed the refundable California Earned Income Tax Credit, the Young Child Tax Credit, and/or the Foster Youth Tax Credit. This is because the credit is not part of the refund from withholding or estimated tax payments.
If the amount on line 95 is more than the amount on line 64, your payments and credits are more than your tax. Subtract the amount on line 64 from the amount on line 95. Enter the result on line 97.
Refund Intercept – The FTB administers the Interagency Intercept Collection (IIC) program on behalf of the State Controller’s Office. The IIC program intercepts (offsets) refunds when individuals and business entities owe delinquent debts to government agencies including the IRS and California colleges. All refunds are subject to interception. The FTB only intercepts the amount owed.
Refunds from joint tax returns may be applied to the debts of the taxpayer or spouse/RDP. After all tax liabilities are paid, any remaining credit will be applied to requested voluntary contributions, if any, and the remainder will be refunded.
If the debt was previously paid to the requestor and the FTB also intercepted the refund, any overpayment will be refunded by the agency that received the funds.
For more information, go to ftb.ca.gov and search for interagency intercept collection .
Apply all or part of the amount on line 97 to your estimated tax for 2025. Enter on line 98 the amount of line 97 that you want applied to your 2025 estimated tax.
An election to apply an overpayment to estimated tax is binding. Once the election is made, the overpayment cannot be applied to a deficiency after the due date of the tax return.
If you entered an amount on line 98, subtract it from the amount on line 97. Enter the result on line 99. Choose to have this entire amount refunded to you or make voluntary contributions from this amount. See “ Voluntary Contribution Fund Descriptions ” for more information.
If the amount on line 95 is less than the amount on line 64, subtract the amount on line 95 from the amount on line 64. Enter the result on line 100. Your tax is more than your payments and credits.
There is a penalty for not paying enough tax during the year. You may have to pay a penalty if:
The tax due on line 100 is $500 or more ($250 or more if married/RDP filing separately).
The amount of state income tax withheld on line 71 is less than 90% of the amount of your total tax on line 64.
If this applies to you, see instructions on line 113.
Increasing your withholding could eliminate the need to make a large payment with your tax return. To increase your withholding, complete EDD Form DE 4, Employee’s Withholding Allowance Certificate, and give it to your employer’s appropriate payroll staff. Get this form from your employer or by calling EDD at 888-745-3886. Download the DE 4 at edd.ca.gov or to use the online calculator to estimate your federal withholding, go to ftb.ca.gov and search for de 4 .
Form DE 4 specifically adjusts your California state withholding and is not the same as the federal Form W-4, Employee’s Withholding Certificate.
You can make voluntary contributions to the funds listed on Side 4. See “ Voluntary Contributions Fund Descriptions ” for more information.
You may also contribute any amount to the State Parks Protection Fund/Parks Pass Purchase . To receive a single annual park pass, your contribution must equal or exceed $195. When applicable, the FTB will forward your name and address from your tax return to the Department of Parks and Recreation (DPR) who will issue a single Vehicle Day Use Annual Pass to you. Only one pass will be provided per tax return. You may contact DPR directly to purchase additional passes. If there is an error on your tax return in the computation of total contributions or if we disallow the contribution you requested because there is no credit available for the tax year, your name and address will not be forwarded to DPR. Any contribution less than $195 will be treated as a voluntary contribution and may be deducted as a charitable contribution. For more information go to parks.ca.gov/annualpass/ or email info@parks.ca.gov .
Add amounts in code 400 through code 447. Enter the result on line 110.
Add or subtract correctly to figure the amount you owe.
If you do not have an amount on line 99, add the amount on line 94, line 96, line 100, and line 110, if any. Enter the result on line 111.
If you have an amount on line 99 and the amount on line 110 is more than line 99, subtract line 99 from line 110 and enter the difference on line 111.
To avoid a late filing penalty, file your Form 540 by the extended due date even if you cannot pay the amount you owe.
Mandatory Electronic Payments – You are required to remit all your payments electronically once you make an estimate or extension payment exceeding $20,000 or you file an original return with a total tax liability over $80,000. Once you meet this threshold, all subsequent payments regardless of amount, tax type, or taxable year must be remitted electronically. The first payment that would trigger the mandatory e-pay requirement does not have to be made electronically. Individuals that do not send the payment electronically will be subject to a 1% noncompliance penalty.
You can request a waiver from mandatory e-pay if one or more of the following is true:
You have not made an estimated tax or extension payment in excess of $20,000 during the current or previous taxable year.
Your total tax liability reported for the previous taxable year did not exceed $80,000.
The amount you paid is not representative of your total tax liability.
For more information or to obtain the waiver form, go to ftb.ca.gov/e-pay .
Electronic payments can be made using Web Pay on FTB’s website, electronic funds withdrawal (EFW) as part of the e-file return, or your credit card.
Electronic Funds Withdrawal – Instead of paying by check or money order, use this convenient option if you e-file. Simply provide your bank information, amount you want to pay, and the date you want the balance due to be withdrawn from your account. Your tax preparation software will offer this option.
Web Pay – Pay the amount you owe using our secure online payment service. Go to ftb.ca.gov/pay for more information.
Credit Card – Use your Discover, MasterCard, Visa, or American Express card to pay your tax. If you pay by credit card, do not mail form FTB 3519 to us. Call 800-272-9829 or go to the ACI Payments, Inc. (formerly Official Payments) website at officialpayments.com , and use the jurisdiction code 1555. ACI Payments, Inc. charges a convenience fee for using this service.
Check or Money Order – Using black or blue ink, make your check or money order payable to the “Franchise Tax Board.” Do not send cash or other items of value (such as stamps, lottery tickets, foreign currency, and gift cards). Write your SSN or ITIN and “2024 Form 540” as applicable on the check or money order. Enclose, but do not staple, your payment with your tax return. Make all checks or money orders payable in U.S. dollars and drawn against a U.S. financial institution. Do not combine your 2024 tax payment and any 2025 estimated tax payment in the same check. Prepare two separate checks and mail each in a separate envelope. If you e-filed your tax return, mail your check or money order with form FTB 3582, Payment Voucher for Individual e-filed Returns. Do not mail a copy of your e-filed tax return. A penalty may be imposed if your check is returned by your bank for insufficient funds.
Paying by Credit Card – Whether you e-file or file by mail, use your Discover, MasterCard, Visa, or American Express card to pay your personal income taxes (tax return balance due, extension payment, estimated tax payment, or tax due with bill notice). There is a convenience fee for this service . This fee is paid directly to ACI Payments, Inc. based on the amount of your tax payment.
2.30% of the tax amount charged (rounded to the nearest cent)
Minimum fee: $1
Example :
Tax Payment = $753.56
Convenience Fee = $17.33
Your payment is effective on the date you charge it.
If you pay your tax liability by credit card and later reverse the credit card transaction, you may be subject to penalties, interest, and other fees imposed by the FTB for nonpayment or late payment of your tax liability.
Once you have determined the type of payment and how much you owe, have the following ready:
Your Discover, MasterCard, Visa, or American Express card
Credit card number
Expiration date
Amount you are paying
Your and your spouse’s/RDP’s SSN or ITIN
First 4 letters of your and your spouse’s/RDP’s last name
Taxable year
Home phone number (including area code)
ZIP code for address where your monthly credit card bill is sent
FTB Jurisdiction Code: 1555
Go to the ACI Payments, Inc. website at officialpayments.com and select Payment Center , or call 800-2PAY-TAX or 800-272-9829 and follow the recorded instructions. ACI Payments, Inc. provides customer assistance at 877-297-7457 Monday through Friday, 5 a.m. to 5 p.m. PST. ACI Payments, Inc. will tell you the convenience fee before you complete your transaction. Decide whether to complete the transaction at that time.
Payment Date:
Confirmation Number:
If you cannot pay the full amount or can only make a partial payment for the amount shown on Form 540, line 114, see the information regarding installment payments in Question 4 of the “ Frequently Asked Questions .”
If you file your tax return or pay your tax after the due date, you may owe interest and penalties on the tax due.
Effective for tax years beginning on or after January 1, 2022, you may request a one-time abatement of a timeliness penalty if: (1) you were not previously required to file a California personal income tax return or have not previously been granted first-time abatement, (2) you have filed all required returns as of the date of the request for first-time abatement, and (3) you have paid, or are in a current arrangement to pay, all tax currently due.
Do not reduce the amount on line 97 or increase the amount on line 100 by any penalty or interest amounts. Enter on line 112 the amount of interest and penalties.
Interest – Interest will be charged on any late filing or late payment penalty from the original due date of the return to the date paid. In addition, if other penalties are not paid within 15 days, interest will be charged from the date of the billing notice until the date of payment. Interest compounds daily and the interest rate is adjusted twice a year. The FTB website has a chart of interest rates in effect since 1976. Go to ftb.ca.gov and search for interest rates .
Late Filing of Tax Return – If you do not file your tax return by October 15, 2025, you will incur a late filing penalty plus interest from the original due date of the tax return. The maximum total penalty is 25% of the tax not paid if the tax return is filed after October 15, 2025. The minimum penalty for filing a tax return more than 60 days late is $135 or 100% of the balance due, whichever is less.
Late Payment of Tax – If you fail to pay your total tax liability by April 15, 2025, you will incur a late payment penalty plus interest. The penalty is 5% of the tax not paid when due plus 1/2% for each month, or part of a month, the tax remains unpaid. We may waive the late payment penalty based on reasonable cause. Reasonable cause is presumed when 90% of the tax shown on the return is paid by the original due date of the return. However, the imposition of interest is mandatory. If, after April 15, 2025, you find that your estimate of tax due was too low, pay the additional tax as soon as possible to avoid or minimize further accumulation of penalties and interest.
Late Payment of Use Tax – To avoid late payment penalties for use tax, you must report and pay the use tax with a timely filed income tax return or California individual use tax return.
Other Penalties – We may impose other penalties if a payment is returned for insufficient funds. We may also impose penalties for negligence, substantial understatement of tax, and fraud.
You may be subject to an estimated tax penalty if any of the following is true:
Your withholding and credits are less than 90% of your current tax year liability.
Your withholding and credits are less than 100% of your prior year tax liability (110% if AGI is more than $150,000 or $75,000 if married/RDP filing separately).
You did not pay enough through withholding to keep the amount you owe with your tax return under $500 ($250 if married/RDP filing separately).
You did not make the required estimated tax payments, if you pay an installment after the date it is due, or if you underpay any installment, a penalty may be assessed on the portion of estimated tax that was underpaid from the due date of the installment to the date of payment or the due date of your return, whichever is earlier. Get the 2024 form FTB 5805, Underpayment of Estimated Tax by Individuals and Fiduciaries, for more information.
The FTB can figure the penalty for you when you file your tax return and send you a bill.
Is line 100 less than $500 ($250 if married/RDP filing separately)?
Is line 100 less than 10% of the amount on line 48 (excluding the tax on lump-sum distributions on line 34)?
The underpayment of estimated tax penalty shall not apply to the extent the underpayment of an installment was created or increased by any provision of law that is chaptered during and operative for the taxable year of the underpayment. To request a waiver of the underpayment of estimated tax penalty, get form FTB 5805 or form FTB 5805F. See “ Where To Get Income Tax Forms and Publications .”
If you complete one of these forms, attach it to the back of your Form 540. Enter the amount of the penalty on line 113 and check the correct box on line 113. Complete and attach the form if you claim a waiver, use the annualized income installment method, or pay tax according to the schedule for farmers and fishermen, even if you do not owe a penalty.
See “ Important Dates ” for more information on estimated tax payments and how to avoid the underpayment penalty.
See the instructions for Form 540, line 114 for information about figuring your payment, if any.
Is there an amount on line 111?
Make all checks or money orders payable in U.S. dollars and drawn against a U.S. financial institution.
Did you report amounts on line 110, line 112, or line 113?
Less than line 99, subtract the sum of line 110, line 112, and line 113 from line 99 and enter the result on line 115. This is your refund amount.
More than line 99, subtract line 99 from the sum of line 110, line 112, and line 113 and enter the result on line 114. This is your total amount due. For payment options, see line 111 instructions.
Direct deposit is safe and convenient. To have your refund directly deposited into your bank account, fill in the account information on line 116 and line 117. Fill in the routing and account numbers and indicate the account type. Verify routing and account numbers with your financial institution. Do not attach a voided check or deposit slip. See the illustration at the end of this line instruction.
Individual taxpayers may request that their refund be electronically deposited into more than one checking or savings account. This allows more options for managing your refund. For example, you can request part of your refund go to your checking account to use now and the rest to your savings account to save for later.
The routing number must be nine digits. The first two digits must be 01 through 12 or 21 through 32. On the sample check, the routing number is 250250025. The account number can be up to 17 characters and can include numbers and letters. Include hyphens but omit spaces and special symbols. On the sample check, the account number is 202020.
Check the appropriate box for the type of account. Do not check more than one box for each line.
Enter the portion of your refund you want directly deposited into each account. Each deposit must be at least $1. When filing an original return, the total of line 116 and line 117 must equal the total amount of your refund on line 115. If line 116 and line 117 do not equal line 115, the FTB will issue a paper check.
When filing an amended return, only complete the amended Form 540 through line 115. Next, complete Schedule X. The amount from Schedule X, line 11 is your additional refund amount. This amount will be carried over to your amended Form 540 and will be entered on line 116 and line 117. The total of the amended Form 540, line 116 and line 117 must equal the total amount of your refund on Schedule X, line 11. If the total of the amended Form 540, line 116 and line 117 does not equal Schedule X, line 11, the FTB will issue a paper check.
Adjusted Refunds – If there is a change made to your refund, you will still receive your refund via direct deposit. For more information on direct deposit of adjusted refunds, go to ftb.ca.gov and search for direct deposit .
Caution : Check with your financial institution to make sure your deposit will be accepted and to get the correct routing and account numbers. The FTB is not responsible for a lost refund due to incorrect account information entered by you or your representative.
Prior to depositing the refund, the FTB may first verify with your financial institution that the name on the account you designated to receive the direct deposit refund matches the name provided on the tax return. Some financial institutions will not allow a joint refund to be deposited to an individual account. If the direct deposit is rejected, the FTB will issue a paper check.
Direct Deposit for ScholarShare 529 College Savings Plans – If you have a ScholarShare 529 College Savings Plan account maintained by the ScholarShare Investment Board, you may have your refund directly deposited to your ScholarShare account. Please visit scholarshare529.com for instructions.
Voter registration information – You may register to vote if you meet these requirements:
You are a United States citizen.
You are a resident of California.
You will be 18 years old by the date of the next election.
You are not in prison or on parole for the conviction of a felony.
For information on voter registration, check the box on Form 540, Side 5, and go to the California Secretary of State website at sos.ca.gov/elections or see "Voting Is Everybody’s Business" section on the Additional Information section.
If you are interested in no-cost or low-cost health care coverage information, check the "Yes" box on Form 540, Side 5. If you check the "Yes" box, you, and your spouse/RDP if filing a joint return, authorize the FTB to share limited information from your tax return with Covered California (the state agency that provides Californians with access to affordable health insurance) for their outreach and enrollment efforts. Limited information that will be shared include the following:
Taxpayer name, or in the case of taxpayers filing a joint tax return, the names of both spouses or RDPs.
Full mailing address listed on the tax return.
Number and age of household dependents.
Gross income.
You must sign your tax return in the space provided on Form 540, Side 6. If you file a joint tax return, your spouse/RDP must also sign it.
Include your preferred phone number and email address in case the FTB needs to contact you regarding your tax return. By providing this information, the FTB will be able to provide you better customer service.
Joint Tax Return – If you file a joint tax return, both you and your spouse/RDP are generally responsible for the tax and any interest or penalties due on the tax return. This means that if one spouse/RDP does not pay the tax due, the other may be liable. See “Innocent Joint Filer Relief” under Additional Information section for more information.
Paid Preparer’s Information – If you pay a person to prepare your Form 540, that person must sign and complete the applicable paid preparer information on Side 6 including an identification number. The IRS requires a paid tax preparer to get and use a preparer tax identification number (PTIN). If the preparer has a federal employer identification number (FEIN), it should be entered only in the space provided. A paid preparer must give you a copy of your tax return to keep for your records.
Third Party Designee – If you want to allow your preparer, a friend, family member, or any other person you choose to discuss your 2024 tax return with the FTB, check the “Yes” box in the signature area of your tax return. Also, print the designee’s name and telephone number.
If you check the “Yes” box, you, and your spouse/RDP, if filing a joint tax return, are authorizing the FTB to call the designee to answer any questions that may arise during the processing of your tax return. You are also authorizing the designee to:
Give the FTB any information that is missing from your tax return.
Call the FTB for information about the processing of your tax return or the status of your refund or payments.
Receive copies of notices or transcripts related to your tax return, upon request.
Respond to certain FTB notices about math errors, offsets, and tax return preparation.
You are not authorizing the designee to receive any refund check, bind you to anything (including any additional tax liability), or otherwise represent you before the FTB. If you want to expand or change the designee’s authorization, go to ftb.ca.gov/poa .
The authorization will automatically end no later than the due date (without regard to extensions) for filing your 2025 tax return. This is April 15, 2026, for most people. If you wish to revoke the authorization before it ends, notify us by telephone at 800-852-5711 or by writing to Franchise Tax Board, PO Box 942840, Sacramento, CA 94240-0040. Include your name, SSN (or ITIN), and the designee’s name.
Power of Attorney – If another person prepared your tax return, he or she is not automatically granted access to your tax information in future dealings with us. At some point, you may wish to designate someone to act on your behalf in matters related or unrelated to this tax return (e.g., an audit examination). To protect your privacy, you must submit to us a legal document called a “Power of Attorney” (POA) authorizing another person to discuss or receive personal information about your income tax records.
For more information, go to ftb.ca.gov/poa .
Do I need to attach a copy of federal Form 1040 or 1040-SR?
Other than Schedule A (Form 1040) or Schedule B (Form 1040), did you attach any federal forms or schedules to your federal Form 1040 or 1040-SR?
If No , do not attach a copy of your federal Form 1040 or 1040-SR return to Form 540.
If Yes , attach a copy of your federal Form 1040 or 1040-SR return and all supporting federal forms and schedules to Form 540.
Exception : If you did not itemize deductions on your federal tax return but will itemize deductions on your California tax return, complete and attach a copy of the federal Schedule A (Form 1040) to Form 540.
Do not attach any documents to your tax return unless specifically instructed. This will help us reduce government processing and storage costs.
Attach all the Forms W-2 and W-2G you received to the lower front of your tax return. Also, attach any Forms 1099, 592-B, and 593 showing California income tax withheld.
If you do not receive your Form(s) W-2 by January 31, 2025, contact your employer or go to ftb.ca.gov and login or register for MyFTB. Only your employer can issue or correct a Form W-2. If you cannot get a copy of your Form W-2, you must complete form FTB 3525, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. See “ Order Forms and Publications ” or go to ftb.ca.gov/forms .
If you forget to send your Form(s) W-2 or other withholding forms with your income tax return, do not send them separately, or with another copy of your tax return. Wait until the FTB requests them from you.
Assemble your tax return in the order shown below.
Caution : Form 540 has six sides. When filing Form 540, you must send all six sides to the FTB.
If your tax return has an amount due , mail your tax return to the following address:
If your tax return shows a refund or no amount due , mail your tax return to the following address:
Tip : e-file and skip this information! The tax software product you use to e-file will help you find out if you qualify for this credit and will figure the correct amount of the credit automatically. Go to ftb.ca.gov to check your e-file options. You can claim the nonrefundable renter’s credit using CalFile.
If you were a resident of California and paid rent on property in California, which was your principal residence, you may qualify for a credit that you can use to reduce your tax. Answer the questions below to see if you qualify. For purposes of California income tax, references to a spouse, husband, or wife also refer to a California Registered Domestic Partner (RDP), unless otherwise specified. When we use the initials RDP, they refer to both a California registered domestic “partner” and a California registered domestic “partnership,” as applicable. For more information on RDPs, get FTB Pub. 737. Do not mail this record. Keep with your tax records.
Were you a resident of California for the entire year in 2024? Military personnel: If you are not a legal resident of California, you do not qualify for this credit. However, your spouse/RDP may claim this credit if he or she was a resident during 2024, and is otherwise qualified. YES. Go to question 2. NO. Stop here. File Form 540NR. See “ Order Forms and Publications .”
Is your California adjusted gross income the amount on line 17 : $52,421 or less if single or married/RDP filing separately; or $104,842 or less if married/RDP filing jointly, head of household, or qualifying surviving spouse/RDP? YES. Go to question 3. NO. Stop here. You do not qualify for this credit.
Did you pay rent, for at least half of 2024, on property (including a mobile home that you owned on rented land) in California, which was your principal residence? YES. Go to question 4. NO. Stop here. You do not qualify for this credit.
Can you be claimed as a dependent by a parent, foster parent, legal guardian, or any other person in 2024? NO. Go to question 6. YES. Go to question 5.
For more than half the year in 2024, did you live in the home of the person who can claim you as a dependent? NO. Go to question 6. YES. Stop here. You do not qualify for this credit.
Was the property you rented exempt from property tax in 2024? You do not qualify for this credit if, for more than half of the year, you rented property that was exempt from property taxes. Exempt property includes most government-owned buildings, church-owned parsonages, college dormitories, and military barracks. However, if you or your landlord paid possessory interest taxes for the property you rented, then you may claim this credit. NO. Go to question 7. YES. Stop here. You do not qualify for this credit.
Did you claim the homeowner’s property tax exemption anytime during 2024? You do not qualify for this credit if you or your spouse/RDP received a homeowner’s property tax exemption at any time during the year. However, if you lived apart from your spouse/RDP for the entire year and your spouse/RDP received a homeowner’s property tax exemption for a separate residence, then you may claim this credit if you are otherwise qualified. NO. Go to question 8. YES. If your filing status is single or married/RDP filing separately, stop here, you do not qualify for this credit. If your filing status is married/RDP filing jointly, go to question 9.
Were you single in 2024? YES. Go to question 11. NO. Go to question 9.
Did your spouse/RDP claim the homeowner’s property tax exemption anytime during 2024? You do not qualify for this credit if you or your spouse/RDP received a homeowner’s property tax exemption at any time during the year. However, if you lived apart from your spouse/RDP for the entire year and your spouse/RDP received a homeowner’s property tax exemption for a separate residence, then you may claim this credit if you are otherwise qualified. NO. Go to question 11. YES. If both you and your spouse/RDP claimed the homeowner’s property tax exemption, stop here, you do not qualify for this credit. Otherwise, go to question 10.
Did you and your spouse/RDP maintain separate residences for the entire year in 2024? YES. Go to question 11. NO. Stop here. You do not qualify for this credit.
If you are: Single, enter $60 on Form 540, line 46. Head of household or qualifying surviving spouse/RDP, enter $120 on Form 540, line 46. Married/RDP filing separately: if you and your spouse/RDP lived in the same rental property and both qualify for this credit, one spouse/RDP may claim the full amount of the credit ($120), or each spouse/RDP may claim half the amount ($60 each). If you and your spouse/RDP lived apart for the entire year and you qualify for this credit, you may claim half the amount of the credit ($60). Enter your credit amount on Form 540, line 46. Married/RDP filing jointly, enter $120 on Form 540, line 46. (Exception: If one spouse/RDP claimed the homeowner’s tax exemption and you lived apart from your spouse/RDP for the entire year, enter $60 on Form 540, line 46.)
Street Address City, State, and ZIP Code Dates Rented in 2024 (From______to______) a b
Name Street Address City, State, ZIP Code, and Telephone Number a b
Make voluntary contributions of $1 or more in whole dollar amounts to the funds listed below. To contribute to the California Seniors Special Fund, use the instructions for code 400 below. The amount you contribute either reduces your overpaid tax or increases your tax due. You may contribute only to the funds listed and cannot change the amount you contribute after you file your tax return. For more information, go to ftb.ca.gov and search for voluntary contributions .
If you and/or your spouse/RDP are 65 years of age or older as of January 1, 2025, and claim the Senior Exemption Credit, you may make a combined total contribution of up to $298 or $149 per spouse/RDP. Contributions made to this fund will be distributed to the Area Agency on Aging Councils of California (TACC) to provide advice on and sponsorship of Senior Citizens issues. Any excess contributions not required by TACC will be distributed to senior citizen service organizations throughout California for meals, adult day care, and transportation.
Contributions will be used to provide grants to California scientists to study Alzheimer’s disease and related disorders. This research includes basic science, diagnosis, treatment, prevention, behavioral problems, and caregiving. With almost 600,000 Californians living with the disease and another 2 million providing care to a loved one with Alzheimer’s, our state is in the early stages of a major public health crisis. Your contribution will ensure that Alzheimer’s disease receives the attention, research, and resources it deserves. For more information go to cdph.ca.gov and search for Alzheimer .
Contributions will be used to help protect and conserve California’s many threatened and endangered species and the wild lands that they need to survive, for the enjoyment and benefit of you and future generations of Californians.
Contributions will fund research toward preventing and curing breast cancer. Breast cancer is the most common cancer to strike women in California. It kills 4,000 California women each year. Contributions also fund research on prevention and better treatment, and keep doctors up-to-date on research progress. For more information about the research your contributions support, go to cbcrp.org . Your contribution can help make breast cancer a disease of the past.
Contributions will be used for the repair and maintenance of the California Firefighters’ Memorial on the grounds of the State Capitol, ceremonies to honor the memory of fallen firefighters and to assist surviving loved ones, and for an informational guide detailing survivor benefits to assist the spouses/RDPs and children of fallen firefighters.
Contributions will be used to help local food banks feed California’s hungry. Your contribution will fund the purchase of much-needed food for delivery to food banks, pantries, and soup kitchens throughout the state. The State Department of Social Services will monitor its distribution to ensure the food is given to those most in need.
Contributions will be used to preserve the memory of California’s fallen peace officers and assist the families they left behind. Since statehood, over 1,300 courageous California peace officers have made the ultimate sacrifice while protecting law-abiding citizens. The non-profit charitable organization, California Peace Officers’ Memorial Foundation, has accepted the privilege and responsibility of maintaining a memorial for fallen officers on the State Capitol grounds. Each May, the Memorial Foundation conducts a dignified ceremony honoring fallen officers and their surviving families by offering moral support, crisis counseling, and financial support that includes academic scholarships for the children of those officers who have made the supreme sacrifice. On behalf of all of us and the law-abiding citizens of California, thank you for your participation.
The California Coastal Conservancy and the Department of Fish and Wildlife will each be allocated 50% of the contributions. Contributions allocated to the California Coastal Conservancy will be used for research, science, protection, projects, or programs related to the Federal Sea Otter Recovery Plan or improving the nearshore ocean ecosystem, including, program activities to reduce sea otter mortality. Contributions allocated to the Department of Fish and Wildlife will be used to establish a sea otter fund within the department’s index coding system for increased investigation, prevention, and enforcement action.
Contributions will be used to conduct research relating to the causes, detection, and prevention of cancer and to expand community-based education on cancer, and to provide prevention and awareness activities for communities that are disproportionately at risk or afflicted by cancer.
Contributions will be used to provide school supplies and health-related products to homeless children.
Contributions will be used for the protection and preservation of California’s state parks and for the cost of a Vehicle Day Use Annual Pass valid at most park units where day use fees are collected. The pass is not valid at off-highway vehicle units, or for camping, oversized vehicle, extra vehicle, per-person, or supplemental fees. If a taxpayer’s contribution equals or exceeds $195, the taxpayer will receive a single Vehicle Day Use Annual Pass. Amounts contributed in excess of the parks pass cost may be deducted as a charitable contribution for the year in which the voluntary contribution is made. Any contribution less than $195 will be treated as a voluntary contribution and may be deducted as a charitable contribution. For more information, go to parks.ca.gov/annualpass/ or email info@parks.ca.gov .
Contributions will be used to provide grants to community organizations working to protect, restore, and enhance the California coast and ocean. Contributions will support shoreline cleanups, habitat restoration, coastal access improvements, and ocean education programs.
Contributions will be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade.
Contributions will be used to fund programs designed to prevent and eliminate cat and dog homelessness, including spay and neuter programs.
Contributions will be used to conduct the sessions of the California Senior Legislature and to support its ongoing activities on behalf of older persons.
Contributions will be used to support the rehabilitation of injured, sick, or orphaned native wildlife and for wildlife conservation education.
Contributions will be used to fund the Crisis Intervention Team program that trains peace officers to assist and engage safely with persons living with mental illness.
Contributions will be used to support the collaboration of clinicians, scientists, and academic and industry research organizations relating to the cure, screening, and treatment of amyotrophic lateral sclerosis (ALS).
Credit Name Code Description California Competes Tax – FTB 3531 233 The credit, which is allocated and certified by the California Competes Tax Credit Committee, is available for businesses that want to come to California or to stay and grow in California. Website: business.ca.gov California Motion Picture and Television Production – FTB 3541 223 For taxable years beginning on or after January 1, 2011, the original credit is allocated and certified by the California Film Commission, and is available for qualified production expenditures attributable to a qualified motion picture, an independent film, or a TV series that relocates to California. Website: film.ca.gov Cannabis Equity Tax – FTB 3821 247 The credit is available to a qualified taxpayer that is an equity licensee that has received approval, including approval contingent upon the availability of funds, for the fee waiver and deferral program administered by the Department of Cannabis Control (DCC). Child Adoption Costs – See worksheet in the Special Credits and Nonrefundable Credits section 197 50% of qualified costs in the year an adoption is ordered. Child and Dependent Care Expenses – FTB 3506. See instructions in the Special Credits and Nonrefundable Credits section 232 Similar to the federal credit except that the California credit amount is based on a specified percentage of the federal credit. College Access Tax – FTB 3592 235 The credit, which is allocated and certified by the California Educational Facilities Authority, is available for taxpayers who contribute to the College Access Tax Credit Fund. Website: treasurer.ca.gov/cefa Dependent Parent – See instructions in the Special Credits and Nonrefundable Credits section 173 Must use married/RDP filing separately status and have a dependent parent. Disabled Access for Eligible Small Businesses – FTB 3548 205 Similar to the federal credit but limited to $125 based on 50% of qualified expenditures that do not exceed $250. Donated Agricultural Products Transportation – FTB 3547 204 50% of the costs paid or incurred for the transportation of agricultural products donated to nonprofit charitable organizations. Earned Income Tax – FTB 3514 None This refundable credit is similar to the federal Earned Income Credit (EIC) but with different income limitations. Foster Youth Tax – FTB 3514 None This refundable credit is available to taxpayers who also qualify for the California Earned Income Tax Credit (EITC), age 18 to 25, were in foster care while 13 years of age or older and placed through the California foster care system. High-Road Cannabis Tax – FTB 3820 246 The credit is available to a qualified taxpayer that is a commercial cannabis business that possesses a Type-10 (retailer), or a Type-12 (micro-business) license issued by the DCC. A qualified taxpayer must request a tentative credit reservation from the FTB. Homeless Hiring Tax – FTB 3831 244 The credit is available to qualified taxpayers that hire eligible individuals. Employers must obtain a certification of individual’s homeless status from an organization that works with the homeless and must receive a tentative credit reservation for that employee from the FTB. Joint Custody Head of Household – See worksheet in the Special Credits and Nonrefundable Credits section 170 30% of tax up to $592 for taxpayers who are single or married/RDP filing separately, who have a child and meet the support test. Low-Income Housing – FTB 3521 172 Similar to the federal credit but limited to low-income housing in California. Natural Heritage Preservation – FTB 3503 213 55% of the fair market value of any qualified contribution of property donated to the state, any local government, or any nonprofit organization designated by a local government. New California Motion Picture and Television Production – FTB 3541 237 For taxable years beginning on or after January 1, 2016, the new credit is allocated and certified by the California Film Commission, and is available for qualified production expenditures attributable to a qualified motion picture, an independent film, or a TV series that relocates to California. Website: film.ca.gov New Donated Fresh Fruits or Vegetables – FTB 3814 238 15% of the qualified value of the donated fresh fruits, vegetables, or other qualified donated items made to California food banks, based on weighted average wholesale price. New Employment – FTB 3554 234 The credit is available for qualified taxpayers that hire a qualified full-time employee, pay or incur qualified wages, and receive a tentative credit reservation for a qualified full-time employee. Nonrefundable Renter’s – See Nonrefundable Renter’s Credit Qualification Record in these instructions None For California residents who paid rent for their principal residence for at least 6 months in 2024 and whose AGI does not exceed a certain limit. Other State Tax – Schedule S 187 Net income tax paid to another state or a U.S. possession on income also taxed by California. Pass-Through Entity Elective Tax – FTB 3804-CR 242 For taxable years beginning on or after January 1, 2021, and before January 1, 2026, California allows a credit against the personal income tax to a taxpayer, other than a partnership, that is a partner, shareholder, or member of a qualified entity that elects to pay the elective tax. Prior Year Alternative Minimum Tax – FTB 3510 188 Must have paid alternative minimum tax in a prior year and have no alternative minimum tax liability in 2024. Prison Inmate Labor – FTB 3507 162 10% of wages paid to prison inmates. Program 3.0 California Motion Picture and Television Production – FTB 3541 239 For taxable years beginning on or after January 1, 2020, the program 3.0 credit is allocated and certified by the California Film Commission, and is available for qualified production expenditures attributable to a qualified motion picture, an independent film, or a TV series that relocates to California. Website: film.ca.gov Research – FTB 3523 183 Similar to the federal credit but limited to costs for research activities in California. Senior Head of Household – See worksheet in the Special Credits and Nonrefundable Credits section 163 2% of taxable income up to $1,806 for seniors who qualified for head of household in 2022 or 2023 and whose qualifying individual died during 2022 or 2023. Soundstage Filming Tax – FTB 3541 245 For taxable years beginning on or after January 1, 2022, the Soundstage Filming credit is allocated and certified by the California Film Commission, and is available for qualified production expenditures attributable to a qualified motion picture, an independent film, or a TV series that is produced in California at a certified studio construction project and by a qualified taxpayer that provides a diversity workplan that is approved by the California Film Commission. Website: film.ca.gov State Historic Rehabilitation Tax – FTB 3835 243 The credit, which is allocated by the California Tax Credit Allocation Committee, is for the rehabilitation of certified historic structures and for individual taxpayers, a qualified residence. Website: ohp.parks.ca.gov Young Child Tax – FTB 3514 None This refundable credit is available to taxpayers who also qualify for the California EITC or who would otherwise have been allowed the California EITC but they have earned income of zero dollars or less, and who have at least one qualifying child who is younger than six years old as of the last day of the taxable year.
The expiration dates for the credits listed below have passed. However, these credits had carryover provisions. You may claim these credits only if you have an unused carryover available from prior years. If you are not required to complete Schedule P (540), get form FTB 3540 to figure your credit carryover to future years. For Enterprise Zone (EZ), Local Agency Military Base Recovery Area (LAMBRA), Manufacturing Enhancement Area (MEA), or Targeted Tax Area (TTA) credit carryovers, get form FTB 3805Z, form FTB 3807, form FTB 3808, or form FTB 3809. See “ Where To Get Income Tax Forms and Publications .”
Agricultural Products: 175
Commercial Solar Electric System: 196
Commercial Solar Energy: 181
Donated Fresh Fruits or Vegetables: 224
Employee Ridesharing: 194
Employer Childcare Contribution: 190
Employer Childcare Program: 189
Employer Ridesharing: Large employer: 191 Small employer: 192 Transit passes: 193
Energy Conservation: 182
Enhanced Oil Recovery: 203
Enterprise Zone Hiring: 176
Enterprise Zone Sales or Use Tax: 176
Environmental Tax: 218
Farmworker Housing: 207
Local Agency Military Base Recovery Area Hiring: 198
Local Agency Military Base Recovery Area Sales or Use Tax: 198
Low-Emission Vehicles: 160
Main Street Small Business Tax: 240
Main Street Small Business Tax II: 241
Manufacturing Enhancement Area Hiring: 211
Orphan Drug: 185
Political Contributions: 184
Recycling Equipment: 174
Residential Rental & Farm Sales: 186
Ridesharing: 171
Salmon & Steelhead Trout Habitat Restoration: 200
Solar Energy: 180
Solar Pump: 179
Targeted Tax Area Hiring: 210
Targeted Tax Area Sales or Use Tax: 210
Water Conservation: 178
Young Infant: 161
(Go to ftb.ca.gov for more frequently asked questions.)
What if I can’t file by April 15, 2025, and I think I owe tax? You must pay 100% of the amount you owe by April 15, 2025, to avoid interest and penalties. If you cannot file because you have not received all your federal Form(s) W-2, estimate the amount of tax you owe by completing form FTB 3519. Mail it to the FTB with your payment by April 15, 2025, or pay online at ftb.ca.gov/pay . Then, when you receive all your federal Form(s) W-2, complete and mail your tax return by October 15, 2025 (you must use Form 540). Also, see " Interest and Penalties " section for information regarding a one-time timeliness penalty abatement.
I never received a federal Form W-2. What should I do? Automated Phone code: 204 If all of your federal Forms W-2 were not received by January 31, 2025, contact your employer. Only an employer issues or corrects a federal Form W-2. For more information, call 800-338-0505, follow the recorded instructions and enter code 204 when instructed. If you cannot get a copy of your federal Form W-2, complete form FTB 3525. See “ Where To Get Income Tax Forms and Publications .” For online wage and withholding information, go to ftb.ca.gov and login or register for MyFTB.
How can I get help? Throughout California more than 1,200 sites provide trained volunteers offering free help during the tax filing season to persons who need to file simple federal and state income tax returns. Many military bases also provide this service for members of the U.S. Armed Forces. Go to ftb.ca.gov and search for vita to find a list of participating locations or call the FTB at 800-852-5711 to find a location near you.
What do I do if I can’t pay what I owe with my 2024 tax return? Pay as much as possible when you file your tax return. If unable to pay your tax in full with your tax return, make a request for monthly payments. However, interest accrued and an underpayment penalty may be charged on the tax not paid by April 15, 2025, even if your request for monthly payments is approved. To make monthly payments, complete form FTB 3567, Installment Agreement Request, online or mail it to the address on the form. Do not mail it with your tax return . The Installment Agreement Request might not be processed and approved until after your tax return is processed, and you may receive a bill before you receive approval of your request. Automated Phone code: 949 To order this form, go to ftb.ca.gov/forms or call 800-338-0505, follow the recorded instructions and enter code 949 when instructed. Automated Phone code: 610 For information on how to pay by credit card, go to ftb.ca.gov/pay , or call 800-338-0505, follow the recorded instructions and enter code 610 when instructed.
Is direct deposit safe? Direct deposit is safe and convenient. To have your refund directly deposited into your bank account, fill in the account information on Form 540, Side 5, line 116 and line 117. Fill in the routing and account numbers and indicate the account type.
How can I check on the status of my refund? Go to ftb.ca.gov and search for refund status . You will need your social security number (SSN) or individual taxpayer identification number (ITIN) and the refund amount from your tax return. You can also call our automated phone service. See " Automated Phone Service " for more information.
I discovered an error on my tax return. What should I do? Automated Phone code: 908 If you discover that you made an error on your California income tax return after you filed it (paper or e-filed), file an amended Form 540 and attach Schedule X to correct your previously filed tax return. Get Schedule X at ftb.ca.gov/forms or call 800-338-0505, follow the recorded instructions and enter code 908 when instructed.
The IRS made changes to my federal tax return. What should I do? If your federal income tax return is examined and changed by the IRS and you owe additional tax, report these changes to the FTB within six months of the date of the final federal determination. If the changes the IRS made result in a refund due for California, claim a refund within two years of the date of the final federal determination. File an amended Form 540 and Schedule X to correct your previously filed income tax return and mail them to the following address, as applicable: Mail Without payment Franchise Tax Board PO Box 942840 Sacramento, CA 94240-0001 With payment Franchise Tax Board PO Box 942867 Sacramento, CA 94267-0001 Or send a copy of the federal changes to: Mail ATTN RAR/VOL MS F310 Franchise Tax Board PO Box 1998 Rancho Cordova, CA 95741-1998 Or fax the information to 916-843-2269. If you have a question relating to the IRS audit adjustments , call 916-845-4028. For general tax information or questions, call 800-852-5711. Regardless of which method you use to notify the FTB, you must include a copy of the final federal determination along with all data and schedules on which the federal adjustment was based. Get FTB Pub. 1008, Federal Tax Adjustments and Your Notification Responsibilities to California, for more information. See “ Order Forms and Publications .” File an amended Form 540 and Schedule X only if the change affected your California tax liability.
How long should I keep my tax information? Requests for information regarding your California income tax return usually occurs within the California statute of limitations period, which is usually the later of four years from the due date of the tax return or four years from the file date of the tax return. ( Exception : An extended statute of limitations period applies for California or federal tax returns related or subject to a federal audit.) Keep a copy of your tax return and the records that verify the income, deductions, adjustments, or credits reported on your return. Some records should be kept longer. For example, keep property records as long as needed to figure the basis of the property or records needed to verify carryover items (i.e., net operating losses, capital losses, passive losses, casualty losses, etc.) or records needed to track deferred gains on a 1031 exchange.
I will be moving after I file my tax return. How do I notify the FTB of my new address? Go to ftb.ca.gov and login or register for MyFTB or call 800-852-5711, and follow the recorded instructions to report a change of address. You may also use form FTB 3533, Change of Address for Individuals. This form is available at ftb.ca.gov/forms . If you change your address online or by phone, you do not need to file form FTB 3533. After filing your tax return, report a change of address to us for up to four years, especially if you leave the state and no longer have a requirement to file a California tax return.
Are all domestic partners required to file joint or separate tax returns? No, only domestic partners who are registered with the California Secretary of State are required to file using the married/RDP filing jointly or married/RDP filing separately filing status.
Owe Money? Web Pay lets you pay online , so you can schedule it and forget it! Go to ftb.ca.gov/pay for more information.
The use tax has been in effect in California since July 1, 1935. It applies to purchases of merchandise for use in California from out-of-state sellers and is similar to the sales tax paid on purchases you make in California. If you have not already paid all use tax due to the California Department of Tax and Fee Administration, you may be able to report and pay the use tax due on your state income tax return. See the information below and the instructions for Line 91 of your income tax return.
In general, you must pay California use tax on purchases of merchandise for use in California made from out-of-state sellers, for example, by telephone, over the Internet, by mail, or in person.
You must pay California use tax on taxable items if:
The seller does not collect California sales or use tax, and
You use, gift, store, or consume the item in this state.
Example: You live in California and purchase a dining table from a company in North Carolina. The company ships the table from North Carolina to your home for your use and does not charge California sales or use tax. You owe use tax on the purchase.
However, not all purchases require you to pay use tax. For example, you would include purchases of clothing, but not exempt purchases of food products or prescription medicine.
For more information on nontaxable and exempt purchases, you may refer to Publication 61, Sales and Use Taxes: Tax Expenditures, on the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov .
For information about California use tax, please refer to the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov and type “ Find Information About Use Tax ” in the search bar.
Complete the Use Tax Worksheet or use the Use Tax Lookup Table , to calculate the amount due.
If you request an extension to file your income tax return, wait until you file your tax return to report your purchases subject to use tax and make your use tax payment.
Failure to timely report and pay the use tax due may result in the assessment of interest, penalties, and fees.
For purchases made during taxable years starting on or after January 1, 2015, payments and credits reported on an income tax return will be applied first to the use tax liability, instead of income tax liabilities, penalties, and interest.
Do not file an Amended Income Tax Return to revise the use tax previously reported. If you have changes to the amount of use tax previously reported on the original return, contact the California Department of Tax and Fee Administration.
For assistance with your use tax questions, go to the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov or call their Customer Service Center at 800-400-7115 (TTY:711) (for hearing and speech disabilities). For California income tax information, contact the Franchise Tax Board at ftb.ca.gov .
The FTB is required to assess collection and filing enforcement cost recovery fees on delinquent accounts.
A final return must be filed for a person who died in 2024 if a tax return normally would be required. The administrator or executor, if one is appointed, or beneficiary must file the tax return. Print “deceased” and the date of death next to the taxpayer’s name at the top of the tax return.
If you are a surviving spouse/RDP and no administrator or executor has been appointed, file a joint tax return if you did not remarry or enter into another registered domestic partnership during 2024. Indicate next to your signature that you are the surviving spouse/RDP.
You may also file a joint tax return with an administrator or executor acting on behalf of the deceased taxpayer.
If you file a tax return and claim a refund due to a deceased taxpayer, you are certifying under penalty of perjury either that you are the legal representative of the deceased taxpayer’s estate (in this case, attach certified copies of the letters of administration or letters testamentary) or that you are entitled to the refund as the deceased’s surviving relative or sole beneficiary under the provisions of the California Probate Code. You must also attach a copy of federal Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, and a copy of the death certificate when you file a tax return and claim a refund due.
If you file a joint tax return, both you and your spouse/RDP are generally responsible for paying the tax and any interest or penalties due on the tax return. However, you may qualify for relief of payment on all or part of the balance as an innocent joint filer. For more information, get form FTB 705, Innocent Joint Filer Relief Request, at ftb.ca.gov/forms or call 916-845-7072, Monday through Friday from 8 a.m. until 5 p.m., except holidays.
If you are a member of the military and need additional information on how to file your tax return, get FTB Pub. 1032. See “ Order Forms and Publications .”
The FTB keeps personal income tax returns for three and one-half years from the original due date. To get a copy of your tax return, write a letter or complete form FTB 3516, Request for Copy of Personal Income or Fiduciary Tax Return. In most cases, a $20 fee is charged for each taxable year you request. However, no charge applies for victims of a designated California or federal disaster; or if you request copies from a field office that assisted you in completing your tax return. See “Where To Get Tax Forms and Publications” to download or order form FTB 3516.
You cannot deduct the amounts you pay for local benefits that apply to property in a limited area (construction of streets, sidewalks, or water and sewer systems). You must look at your real estate tax bill to determine if any nondeductible itemized charges are included in your bill. For more information, get federal Pub. 17, Your Federal Income Tax – For Individuals, Chapter 11.
On your federal Schedule A (Form 1040), Itemized Deductions, you may deduct the California motor vehicle license fee listed on your Vehicle Registration Billing Notice from the Department of Motor Vehicles. The other fees listed on your billing notice such as registration fee, weight fee, and county fees are not deductible.
You may register to vote if you meet these requirements:
You are a United States citizen.
You are a resident of California.
You will be 18 years old by the date of the next election.
You are not in prison or on parole for the conviction of a felony.
You need to re-register every time you move, change your name, or wish to change political parties. In order to vote in an election, you must be registered to vote at least 15 days before that election. If you need to get a Voter Registration Card, call the California Secretary of State’s Voter Hotline at 800-345-VOTE or go to sos.ca.gov .
To register to vote in California, you must be:
A United States citizen and a resident of California,
18 years old or older on Election Day,
Not currently in state or federal prison or on parole for the conviction of a felony, and
Not currently found mentally incompetent to vote by a court.
Pre-register at 16. Vote at 18. Voter pre-registration is now available for 16 and 17 year olds who otherwise meet the voter registration eligibility requirements. California youth who pre-register to vote will have their registration become active once they turn 18 years old.
If you wish to receive a paper Voter Registration or Pre-Registration Application, call the California Secretary of State’s Voter Hotline at 800-345-VOTE or simply register online at RegisterToVote.ca.gov . For more information about how and when to register to vote, visit sos.ca.gov/elections .
It’s Your Right … Register and Vote
If you e-file your tax return, make sure all the amounts entered on the paper copy of your California return are correct before you sign form FTB 8453, California e-file Return Authorization for Individuals, or form FTB 8879, California e-file Signature Authorization for Individuals. If you are requesting direct deposit of a refund, make sure your account and routing information is correct. Your tax return can be transmitted to the FTB by your preparer or electronic e-file service only after you sign form FTB 8453 or form FTB 8879. The preparer or electronic e-file service must provide you with:
A copy of form FTB 8453 or FTB 8879.
Any original California Forms 592-B, 593, and federal Forms W-2, 1099-G, and other Form(s) 1099 that you provided.
A paper copy of your California tax return showing the data transmitted to the FTB.
You cannot retransmit an e-filed tax return once we have accepted the original. You can correct an error by filing an amended Form 540 and Schedule X to correct your previously filed tax return.
Protective Claim – If you are filing a claim for refund for a taxable year where an audit is being conducted by another state’s taxing agency, litigation is pending or where a final determination by the IRS is pending, check box a for “Protective claim for refund” on Schedule X, Part II, line 1. Specify the pending litigation or reference to the federal determination on Part II, line 2 so we can properly process your claim.
Do not attach your previously filed return to your amended return.
Do not file an amended return to correct your SSN, name, or address, instead, call or write to us. See “Contacting the Franchise Tax Board” for more information.
Use Tax – Do not amend your return to correct a use tax error reported on your original tax return. Enter the amount from your original return. The California Department of Tax and Fee Administration (CDTFA) administers this tax. Refer all questions or requests relating to use tax to the CDTFA at cdtfa.ca.gov or call 800-400-7115 .
Amount You Want Applied To Your 2025 Estimated Tax – Enter zero on amended Form 540, line 98 and get the instructions for Schedule X for the actual amount you want applied to your 2025 estimated tax.
Voluntary Contributions – You cannot amend voluntary contributions. Enter the amount from your original return.
Direct Deposit – You can now use direct deposit on your amended return.
When filing an amended return, only complete the amended Form 540 through line 115. Next, complete Schedule X. The amount from Schedule X, line 11 is your additional refund amount. This amount will be carried over to your amended Form 540 and will be entered on line 116 and line 117. The total of the amended Form 540, line 116 and line 117 must equal the total amount of your refund on Schedule X, line 11. If the total of the amended Form 540, line 116 and line 117 does not equal Schedule X, line 11, the FTB will issue a paper check.
Dependent Exemption Credit with No ID – For taxable years beginning on or after January 1, 2018, taxpayers claiming a dependent exemption credit for a dependent who is ineligible for an SSN and a federal ITIN may provide alternative information to the FTB to identify the dependent. To claim the dependent exemption credit, taxpayers complete form FTB 3568, attach the form and required documentation to their tax return, and write “no id” in the SSN field of line 10, Dependents, on Form 540. For each dependent being claimed that does not have an SSN and an ITIN, a form FTB 3568 must be provided along with supporting documentation.
If you are amending a return beginning with taxable year 2018 to claim the dependent exemption credit, complete an amended Form 540, and write “no id” in the SSN field on the Dependents line, and attach Schedule X. To complete Schedule X, check box m for “Other” on Part II, line 1, and write the explanation “Claim dependent exemption credit with no id and form FTB 3568 is attached” on Part II, line 2. Make sure to attach form FTB 3568 and the required supporting documents in addition to the amended return and Schedule X. If you do not claim the dependent exemption credit on the original 2024 tax return, you may amend the 2024 tax return following the same procedures used to amend your previous year amended tax returns beginning with taxable year 2018. If claiming a refund, taxpayers must amend their returns within the statute of limitations. For more information, get FTB Notice 2021-01.
Use Form 540 to amend your original or previously filed California resident income tax return. If the FTB adjusted your return, you should use the amounts as adjusted by the FTB. Check the box at the top of Form 540 indicating AMENDED return and follow the instructions. Submit the completed amended Form 540 and Schedule X along with all required schedules and supporting forms.
Generally, if you filed federal Form 1040-X, Amended U.S. Individual Income Tax Return, file an amended California tax return within six months unless the changes do not affect your California tax liability. File an amended return only after you have filed your original or previously filed California tax return.
Original tax return was filed on or before April 15th : If you are making a claim for refund, file an amended tax return within four years from the original due date of the tax return or within one year from the date of overpayment, whichever period expires later.
Original tax return was filed within the extension period (April 15th – October 15th) : If you are making a claim for refund, file an amended tax return within four years from the date the original tax return was filed or within one year from the date of overpayment, whichever period expires later.
Original tax return was filed after October 15th : If you are making a claim for refund, file an amended tax return within four years from the original due date of the tax return (April 15th) or within one year from the date of overpayment, whichever period expires later.
If you are filing your amended tax return after the normal statute of limitation period (four years after the due date of the original tax return), attach a statement explaining why the normal statute of limitations does not apply.
If you are filing your amended return in response to a billing notice you received , you will continue to receive billing notices until your amended tax return is accepted. You may file an informal claim for refund even though the full amount due including tax, penalty, and interest has not yet been paid. After the full amount due has been paid, you have the right to appeal to the Office of Tax Appeals at ota.ca.gov or to file suit in court if your claim for refund is disallowed.
To file an informal claim for refund, check box l for “Informal claim” on Schedule X, Part II, line 1 and mail the claim to:
The statute of limitations for filing claims for refunds is suspended during periods when a taxpayer is “financially disabled.” You are considered “financially disabled” when you are unable to manage your financial affairs due to a medically determinable physical or mental impairment that is deemed to be either a terminal impairment or is expected to last for a continuous period of not less than 12 months. You are not considered “financially disabled” during any period that your spouse/RDP or any other person is legally authorized to act on your behalf on financial matters. For more information, get form FTB 1564, Financially Disabled – Suspension of the Statute of Limitations.
If you were notified of an error on your federal income tax return that changed your AGI, you may need to amend your California income tax return for that year.
If the IRS examines and changes your federal income tax return, and you owe additional tax, report these changes to the FTB within six months. You do not need to inform the FTB if the changes do not increase your California tax liability. If the changes made by the IRS result in a refund due, you must file a claim for refund within two years. Use an amended Form 540 and Schedule X to make any changes to your California income tax returns previously filed.
Include a copy of the final federal determination, along with all underlying data and schedules that explain or support the federal adjustment.
Note : Most penalties assessed by the IRS also apply under California law. If you are including penalties in a payment with your amended tax return, see Schedule X, line 8a instructions.
If your child was required to file form FTB 3800, Tax Computation for Certain Children with Unearned Income, and your taxable income has changed, review your child’s tax return to see if you need to file an amended tax return. Get form FTB 3800 for more information.
If you have not received a refund within six months of filing your amended return, do not file a duplicate amended return for the same year. For information on the status of your refund, you may write to:
For telephone assistance, see General Phone Service .
Your filing status for California must be the same as the filing status you used on your federal income tax return, unless you are in an RDP. If you are an RDP and file single for federal, you must file married/RDP filing jointly or married/RDP filing separately for California. If you entered into a same-sex marriage, your filing status for California would generally be the same as the filing status that was used for federal. If you are a same-sex married individual or an RDP and file head of household for federal, you may file head of household for California only if you meet the requirements to be considered unmarried or considered not in a registered domestic partnership.
Exception for Filing a Separate Tax Return – A married couple who filed a joint federal tax return may file separate state tax returns if either spouse was either of the following:
An active member of the United States armed forces (or any auxiliary military branch) during the year being amended.
A nonresident for the entire year and had no income from California sources during the year being amended.
Changing Your Filing Status – If you changed your filing status on your federal amended tax return, also change your filing status for California unless you meet one of the exceptions listed above.
Married/RDP Filing Jointly to Married/RDP Filing Separately – You cannot change from married/RDP filing jointly to married/RDP filing separately after the due date of the tax return.
Exception : A married couple who meets the “Exception for Filing a Separate Tax Return” shown above may change from joint to separate tax returns after the due date of the tax return.
Filing Separate Tax Returns to Married/RDP Filing Jointly – If you or your spouse/RDP (or both of you) filed a separate tax return, you generally can change to a joint tax return any time within four years from the original due date of the separate tax return(s). To change to a joint tax return, you and your spouse/RDP must have been legally married or in an RDP on the last day of the taxable year.
To amend from separate tax returns to a joint tax return, follow Form 540 instructions to complete only one amended tax return. Both you and your spouse/RDP must sign the amended joint tax return.
Tip : To e-file and eliminate the math, go to ftb.ca.gov . To figure your tax online, go to ftb.ca.gov/tax-rates .
Use only if your taxable income on Form 540, line 19 is more than $100,000. If $100,000 or less, use the Tax Table.
Use if your filing status is Single or Married/RDP Filing Separately If the amount on Form 540, line 19 is Enter on Form 540, line 31 over – but not over – $0 $10,756 $0.00 + 1.00% of the amount over $0 10,756 25,499 107.56 + 2.00% of the amount over 10,756 25,499 40,245 402.42 + 4.00% of the amount over 25,499 40,245 55,866 992.26 + 6.00% of the amount over 40,245 55,866 70,606 1,929.52 + 8.00% of the amount over 55,866 70,606 360,659 3,108.72 + 9.30% of the amount over 70,606 360,659 432,787 30,083.65 + 10.30% of the amount over 360,659 432,787 721,314 37,512.83 + 11.30% of the amount over 432,787 721,314 AND OVER 70,116.38 + 12.30% of the amount over 721,314
Use if your filing status is Married/RDP Filing Jointly or Qualifying Surviving Spouse/RDP If the amount on Form 540, line 19 is Enter on Form 540, line 31 over – but not over – $0 $21,512 $0.00 + 1.00% of the amount over $0 21,512 50,998 215.12 + 2.00% of the amount over 21,512 50,998 80,490 804.84 + 4.00% of the amount over 50,998 80,490 111,732 1,984.52 + 6.00% of the amount over 80,490 111,732 141,212 3,859.04 + 8.00% of the amount over 111,732 141,212 721,318 6,217.44 + 9.30% of the amount over 141,212 721,318 865,574 60,167.30 + 10.30% of the amount over 721,318 865,574 1,442,628 75,025.67 + 11.30% of the amount over 865,574 1,442,628 AND OVER 140,232.77 + 12.30% of the amount over 1,442,628
Use if your filing status is Head of Household If the amount on Form 540, line 19 is Enter on Form 540, line 31 over – but not over – $0 $21,527 $0.00 + 1.00% of the amount over $0 21,527 51,000 215.27 + 2.00% of the amount over 21,527 51,000 65,744 804.73 + 4.00% of the amount over 51,000 65,744 81,364 1,394.49 + 6.00% of the amount over 65,744 81,364 96,107 2,331.69 + 8.00% of the amount over 81,364 96,107 490,493 3,511.13 + 9.30% of the amount over 96,107 490,493 588,593 40,189.03 + 10.30% of the amount over 490,493 588,593 980,987 50,293.33 + 11.30% of the amount over 588,593 980,987 AND OVER 94,633.85 + 12.30% of the amount over 980,987
Example : Chris and Pat Smith are filing a joint tax return using Form 540. Their taxable income on Form 540, line 19 is $125,000.
Using Schedule Y, they find the taxable income range that includes their taxable income of $125,000.
They subtract the amount at the beginning of their range from their taxable income.
Example : $125,000 − 111,732 = $13,268
They multiply the result from Step 2 by the percentage for their range.
Example : $13,268 × .08 = $1,061.44
They round the amount from Step 3 to two decimals (if necessary) and add it to the tax amount for their income range. After rounding the result, they will enter $4,920 on Form 540, line 31.
Example : $3,859.04 + 1,061.44 = $4,920.48
By Internet – You can download, view, and print California income tax forms and publications at ftb.ca.gov/forms or you may have these forms and publications mailed to you. Many of our most frequently used forms may be filed electronically, printed out for submission, and saved for record keeping.
By phone – To order California tax forms and publications:
Refer to the Order Forms and Publications list and find the code number for the form you want to order.
Call 800-338-0505.
Follow the recorded instructions.
Enter the three-digit form code when you are instructed.
Allow two weeks to receive your order. If you live outside California, allow three weeks to receive your order.
In person – Many post offices and libraries provide free California tax booklets during the filing season.
Employees at libraries and post offices cannot provide tax information or assistance.
By mail – Write to:
If you write to us, be sure your letter includes your social security number or individual taxpayer identification number and your daytime and evening telephone numbers. Send your letter to:
We will respond to your letter within 10 weeks. In some cases, we may call you to respond to your inquiry, or ask you for additional information. Do not attach correspondence to your tax return unless the correspondence relates to an item on the return.
The FTB’s goals include making certain that your rights are protected so that you have the highest confidence in the integrity, efficiency, and fairness of our state tax system. For more information, get FTB 4058, California Taxpayers’ Bill of Rights – Information for Taxpayers. See “ Where To Get Income Tax Forms and Publications .”
The privacy and security of your personal information is of the utmost importance to us. We want you to have the highest confidence in the integrity, efficiency, and fairness of our state tax system.
Your Rights and Responsibilities – You have a right to know what types of information we gather, how we use it, and to whom we may provide it. Information collected is subject to the California Information Practices Act, Civil Code section 1798-1798.78, except as provided in R&TC Section 19570.
If you meet certain requirements, you must file a valid tax return and related documents. You must provide your social security number or other identifying number on your tax return and related documents for identification. (R&TC Sections 18501, 18621, and 18624)
Reasons for Information Requests – We may request additional information to verify and collect the correct amount of tax. (R&TC Section 19504) You must provide all requested information, unless indicated as “optional.”
Consequences of Noncompliance – We charge penalties and interest if you:
Meet income requirements but do not file a valid tax return.
Do not provide the information we request.
Provide false information.
We may also disallow your claimed exemptions, exclusions, credits, deductions, or adjustments. If you provide false information, you may be subject to civil penalties and criminal prosecution. Noncompliance can increase your tax liability or delay or reduce any tax refund.
Disclosure of Information – We will not disclose your personal information, unless authorized by law. We may disclose your tax information to:
The Internal Revenue Service.
Other states’ income tax officials.
California government agencies and officials.
Third parties to determine or collect your tax liabilities.
Your authorized representative(s).
If you owe taxes, we may disclose your balance due as part of our collection process to: employers, financial institutions, county recorders, process agents, or other asset holders.
Responsibility for the Records – The director of the Processing Services Bureau maintains FTB’s records. You may review your records and bring any inaccuracies to our attention. You can obtain information about your records by:
To learn more about our Privacy Policy Statement, go to ftb.ca.gov/privacy .
(Keep This Information For Future Use)
Use our automated phone service to get recorded answers to many of your questions about California taxes and to order current year personal income tax forms and publications. You can also:
Get current year tax refund information.
Get balance due and payment information.
Have paper and pencil ready to take notes.
Call our automated phone service, follow the recorded instructions and enter the 3-digit code.
If your current address is on file, you can order California tax forms and publications. Call our automated phone service, follow the recorded instructions and enter the 3-digit code.
If you file by mail, wait at least 8 weeks after you file your tax return before you call to find out about your refund. You need your social security number, the numbers in your street address, box number, route number, or PMB number, and your ZIP code to use this service.
Wait at least 45 days from the date you mailed your payment before you call to verify receipt. You need your social security number, the numbers in your street address, box number, route number, or PMB number, and your ZIP code to use this service.
Telephone assistance is available year-round from 8 a.m. until 5 p.m. Monday through Friday, except holidays. Hours are subject to change.
Large-print forms and instructions – The Resident Booklet is available in large print upon request. See “ Order Forms and Publications ” or " Where To Get Income Tax Forms and Publications ."
Asistencia En Español
Asistencia telefónica está disponible durante todo el año desde las 8 a.m. hasta las 5 p.m. de lunes a viernes, excepto días feriados. Las horas están sujetas a cambios.
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015 , and the California Revenue and Taxation Code (R&TC).
Wildfire Relief Payment – For taxable years beginning after December 31, 2019, and before January 1, 2026, the Federal Disaster Tax Relief Act of 2023 allows an exclusion from gross income for any amount received by an individual as a qualified wildfire relief payment. Generally, California law does not conform. If any qualified amount was excluded from income for federal purposes and California law provides no similar exclusion, include that amount in income for California purposes. For more information, see Schedule CA (540), California Adjustments – Residents, specific line instructions in Part I, Section B, line 8z. For specific wildfire relief payments excluded for California purposes, see General Information .
Net Operating Loss Suspension – For taxable years beginning on or after January 1, 2024, and before January 1, 2027, California has suspended the net operating loss (NOL) carryover deduction. Taxpayers may continue to compute and carryover an NOL during the suspension period. However , taxpayers with net business income or modified adjusted gross income of less than $1,000,000 or with disaster loss carryovers are not affected by the NOL suspension rules.
The carryover period for suspended losses is extended by:
Three years for losses incurred in taxable years beginning before January 1, 2024.
Two years for losses incurred in taxable years beginning on or after January 1, 2024, and before January 1, 2025.
One year for losses incurred in taxable years beginning on or after January 1, 2025, and before January 1, 2026.
For more information, see California Revenue and Taxation Code (R&TC) Section 17276.24, and get form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations – Individuals, Estates, and Trusts.
Special Rules for Certain Distributions from Qualified IRC Section 529 Tuition Plans – The federal Consolidated Appropriations Act (CAA), 2023, allows qualified Internal Revenue Code (IRC) Section 529 tuition plans that have been maintained for 15 years to rollover to a Roth Individual Retirement Arrangement (IRA) without a tax or penalty. Under the federal law, rollover distributions from an IRC Section 529 plan to a Roth IRA after December 31, 2023, will be treated in the same manner as the earnings and contributions of a Roth IRA. California law does not conform to this federal provision. Rollover distribution from an IRC Section 529 plan to a Roth IRA is includible in California taxable income and subject to an additional tax of 2½%. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z.
Catch-Up Contributions for Certain Individuals – For taxable years beginning on or after January 1, 2024, the federal CAA, 2023, provides for the indexing for the $1,000 catch-up contribution to an IRA for individuals age 50 or older. The CAA, 2023, also increases certain contribution amounts, including catch-up contributions for individuals age 50 or over as defined in IRC Section 414(v). California law does not conform to these federal provisions. Any amount contributed that exceeds the contribution amount allowed for California may need to be included in income for California purposes. Any distribution from contributions in excess of the California limit may become taxable when distributed. For more information, see Schedule CA (540) specific line instructions in Part I, Section C, line 20.
Wildfire Mitigation Payment – For taxable years beginning on or after January 1, 2024, and before January 1, 2029, California law allows a qualified taxpayer an exclusion from gross income for any amount received as a California qualified wildfire loss mitigation payment through the California Wildfire Mitigation Financial Assistance Program. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17138.8.
In general, for taxable years beginning on or after January 1, 2015, California law conforms to the IRC as of January 1, 2015. However, there are continuing differences between California and federal law. When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level. For more information, go to ftb.ca.gov and search for conformity . Additional information can be found in FTB Pub. 1001, Supplemental Guidelines to California Adjustments, and the Business Entity tax booklets.
The instructions provided with California tax forms are a summary of California tax law and are only intended to aid taxpayers in preparing their state income tax returns. We include information that is most useful to the greatest number of taxpayers in the limited space available. It is not possible to include all requirements of the R&TC in the instructions. Taxpayers should not consider the instructions as authoritative law.
For updates regarding federal acts, go to ftb.ca.gov and search for conformity .
Federal Acts – In general, the R&TC does not conform to the changes under the following federal acts. California taxpayers continue to follow the IRC as of the specified date of January 1, 2015, with modifications. For specific adjustments due to the following acts, see Schedule CA (540) specific line instructions:
American Rescue Plan Act (ARPA) of 2021 (enacted on March 11, 2021)
Consolidated Appropriations Act (CAA), 2021 (enacted on December 27, 2020)
Setting Every Community Up for Retirement Enhancement (SECURE) Act (enacted on December 20, 2019)
California Hope, Opportunity, Perseverance, and Empowerment (HOPE) for Children Trust Account Program – The California HOPE for Children Trust Account Act created the California HOPE for Children Trust Account Program for the purpose of providing an eligible child with a HOPE trust account. For taxable years beginning on or after January 1, 2023, California law allows an exclusion from gross income for any funds deposited, any investment returns accrued, and any accrued interest in a HOPE trust account and for any funds from a HOPE trust account that is withdrawn or transferred by an eligible youth. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17141.5.
Interagency Council on Homelessness Payment Exclusion – For taxable years beginning on or after January 1, 2023, California law allows an exclusion from gross income for payments received pursuant to the California Welfare and Institutions Code Section 8257 by members of the Interagency Council on Homelessness, its advisory committee, or its working groups who are or have been homeless. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17131.13.
Kincade Wildfire Exclusion – For taxable years beginning on or after January 1, 2020, and before January 1, 2028, California law allows a qualified taxpayer an exclusion from gross income for any qualified amount received in a settlement from Pacific Gas and Electric (PG&E) Company or its subsidiary relating to the 2019 Kincade Fire. If a qualified taxpayer included income for a qualified amount received from this settlement in a prior taxable year, the taxpayer can file an amended tax return for that year within the normal statute of limitations. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17139.2.
Zogg Wildfire Exclusion – For taxable years beginning on or after January 1, 2020, and before January 1, 2028, California law allows a qualified taxpayer an exclusion from gross income for any qualified amount received in a settlement from PG&E Company or its subsidiary relating to the 2020 Zogg Fire. If a qualified taxpayer included income for a qualified amount received from this settlement in a prior taxable year, the taxpayer can file an amended tax return for that year within the normal statute of limitations. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17139.3.
Discharge of Student Fees – For taxable years beginning on or after January 1, 2022, and before January 1, 2027, California law allows an exclusion from gross income for any amount of unpaid fees due or owed by a student to a community college that was discharged pursuant to California Education Code Section 32527. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17131.21.
Guaranteed Income Pilot Program Payment Exclusion – Beginning on June 30, 2022, and before July 1, 2026, California law allows an exclusion from gross income for any payments received by an individual from a guaranteed income pilot program or project that receives a grant pursuant to California Welfare and Institution Code Section 18997. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17131.12.
Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant – For taxable years beginning on or after January 1, 2021, and before January 1, 2030, California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program that is established by Section 12100.975 of the Government Code. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17158.
Turf Replacement Water Conservation Program – For taxable years beginning on or after January 1, 2022, and before January 1, 2027, California law allows an exclusion from gross income for any amount received as a rebate, voucher, or other financial incentive issued by a public water system, as defined, local government, or state agency for participation in a turf replacement water conservation program. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17138.2.
Fire Victims Trust Exclusion – For taxable years beginning before January 1, 2028, California law allows a qualified taxpayer an exclusion from gross income for any amount received from the Fire Victims Trust, established pursuant to the order of the United States Bankruptcy Court for the Northern District of California dated June 20, 2020, case number 19-30088, docket number 8053. If a qualified taxpayer included income for an amount received from the Fire Victims Trust in a prior taxable year, the taxpayer can file an amended tax return for that year within the normal statute of limitations. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17138.5.
Thomas and Woolsey Wildfires Exclusion – For taxable years beginning before January 1, 2027, California law allows a qualified taxpayer an exclusion from gross income for any amount received in a settlement from Southern California Edison for claims relating to the 2017 Thomas Fire or the 2018 Woolsey Fire. If a qualified taxpayer included income for an amount received from these settlements in a prior taxable year, the taxpayer can file an amended tax return for that year within the normal statute of limitations. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17138.6.
Reporting Requirements – Taxpayers may need to file form FTB 4197, Information on Tax Expenditure Items, with the tax return to report tax expenditure items as part of the Franchise Tax Board’s (FTB) annual reporting requirements under R&TC Section 41. To determine if you have an R&TC Section 41 reporting requirement, see the R&TC Section 41 Reporting Requirements section in 540, Personal Income Tax Booklet, or get form FTB 4197.
California Venues Grant – For taxable years beginning on or after September 1, 2020, and before January 1, 2030, California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Venues Grant Program that is administered by the Office of Small Business Advocate (CalOSBA). For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z and R&TC Section 17158.
California Microbusiness COVID-19 Relief Grant – For taxable years beginning on or after January 1, 2020, and before January 1, 2025, California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Microbusiness COVID-19 Relief Program that is administered by CalOSBA. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z.
Other Loan Forgiveness – For taxable years beginning on or after January 1, 2019, California law allows an exclusion from gross income for borrowers of forgiveness of indebtedness described in Section 1109(d)(2)(D) of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act as stated by section 278, Division N of the CAA, 2021. The CAA, 2021, allows deductions for eligible expenses paid for with covered loan amounts. California law conforms to this federal provision, with modifications. For California purposes, these deductions generally do not apply to an ineligible entity. “Ineligible entity” means a taxpayer that is either a publicly-traded company or does not meet the 25% reduction from gross receipts requirements under Section 311 of the CAA, 2021. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 3 or go to ftb.ca.gov and search for AB 80 .
Shuttered Venue Operator Grant – For taxable years beginning on or after January 1, 2019, California law allows an exclusion from gross income for amounts awarded as a shuttered venue operator grant under the CAA, 2021. The CAA, 2021, allows deductions for eligible expenses paid for with grant amounts. California law conforms to this federal provision, with modifications. For California purposes, these deductions do not apply to an ineligible entity. "Ineligible entity" means a taxpayer that is either a publicly-traded company or does not meet the 25% reduction from gross receipts requirements under Section 311 of Division N of the CAA, 2021. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 3 and R&TC Section 17158.3.
Small Business COVID-19 Relief Grant Program – For taxable years beginning on or after January 1, 2020, and before January 1, 2030, California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the COVID-19 Relief Grant under Executive Order No. E 20/21-182 and the California Small Business COVID-19 Relief Grant Program established by Section 12100.83 of the Government Code. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z.
Income Exclusion for Rent Forgiveness – For taxable years beginning on or after January 1, 2020, and before January 1, 2025, gross income shall not include a tenant’s rent liability that is forgiven by a landlord or rent forgiveness provided through funds grantees received as a direct allocation from the Secretary of the Treasury based on the CAA, 2021. For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8z.
Moving Expense Deduction – For taxable years beginning on or after January 1, 2021, taxpayers should file California form FTB 3913, Moving Expense Deduction, to claim moving expense deductions. Attach the completed form FTB 3913 to Form 540, California Resident Income Tax Return. For more information, see Schedule CA (540) specific line instructions in Part I, Section C, line 14, and get form FTB 3913.
Paycheck Protection Program (PPP) Loans Forgiveness – For taxable years beginning on or after January 1, 2019, California law allows an exclusion from gross income for covered loan amounts forgiven under the federal CARES Act, Paycheck Protection Program and Health Care Enhancement Act, Paycheck Protection Program Flexibility Act of 2020, the CAA, 2021, or the PPP Extension Act of 2021.
Also, the ARPA expands PPP eligibility to include “additional covered nonprofit entities” which includes certain Code 501(c) nonprofit organizations and Internet-only news publishers and Internet-only periodical publishers. California law does not conform to this expansion of PPP eligibility.
The CAA, 2021, allows deductions for eligible expenses paid for with covered loan amounts. California law conforms to this federal provision, with modifications. For California purposes, these deductions do not apply to an ineligible entity. “Ineligible entity” means a taxpayer that is either a publicly-traded company or does not meet the 25% reduction from gross receipts requirements under Section 311 of Division N of the CAA, 2021.
For more information, see specific line instructions for Schedule CA (540) in Part I, Section B, line 3 and R&TC Section 17131.8 or go to ftb.ca.gov and search for AB 80 .
SECURE Act Repeal of Maximum Age 70½ – The SECURE Act repealed the maximum age of 70½ for traditional IRA contributions. California law does not conform to this federal provision. For more information, see Schedule CA (540) specific line instructions in Part I, Section C, line 20.
Coronavirus Aid, Relief, and Economic Security (CARES) Act – The CARES Act was enacted on March 27, 2020. In general, the R&TC does not conform to the changes. California taxpayers continue to follow the IRC as of the specified date of January 1, 2015, with modifications. California law does not conform to the following federal provisions under the CARES Act:
Exclusion for certain employer payment of student loans
Health-savings account changes
The above list is not intended to be all-inclusive of the federal and state conformities and differences. For more information, see specific line instructions or refer to the R&TC.
Worker Status: Employees and Independent Contractors – Some individuals may be classified as independent contractors for federal purposes and employees for California purposes, which may also cause changes in how their income and deductions are classified. Proposition 22 was operative as of December 16, 2020, and may affect a taxpayer’s worker classification. For more information, see Schedule CA (540) specific line instructions in Part I, Section A, line 1a; Part I, Section B, line 3; Part I, Section C, line 15 and line 17; and Part II, line 4.
Rental Real Estate Activities – For taxable years beginning on or after January 1, 2020, the dollar limitation for the offset for rental real estate activities shall not apply to the low income housing credit program. For more information, see R&TC Section 17561(d)(1). Get form FTB 3801-CR, Passive Activity Credit Limitations, for more information.
Commercial Cannabis Activity – For taxable years beginning on or after January 1, 2020, and before January 1, 2030, California allows individuals and other taxpayers operating under the personal income tax law to claim credits and deductions of business expenses paid or incurred during the taxable year in conducting commercial cannabis activity. Sole proprietors are those that conduct a commercial cannabis activity that is licensed under California Medicinal and Adult-Use Cannabis Regulation and Safety Act (CA MAUCRSA). For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 3, and get form FTB 4197.
Excess Business Loss Limitation – The CARES Act made amendments to IRC Section 461(l) by eliminating the excess business loss limitation of noncorporate taxpayers for taxable year 2020 and retroactively removing the limitation for taxable years 2018 and 2019. California law does not conform to those amendments. Also, California law does not conform to the federal changes in the ARPA and the federal Inflation Reduction Act of 2022 that extend the limitation on excess business losses of noncorporate taxpayers for taxable years beginning after December 31, 2020, and ending before January 1, 2029. Complete form FTB 3461, California Limitation on Business Losses, if you are a noncorporate taxpayer and your net losses from all of your trades or businesses are more than $305,000 ($610,000 for married/RDP taxpayers filing a joint return). For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 8p, and get form FTB 3461.
Alimony – California law does not conform to changes made by the TCJA to federal law regarding alimony and separate maintenance payments that are not deductible by the payor spouse, and are not includable in the income of the receiving spouse, if made under any divorce or separation agreement executed after December 31, 2018, or executed on or before December 31, 2018, and modified after that date (if the modification expressly provides that the amendments apply). For more information, see Schedule CA (540) specific line instructions in Part I, Section B, line 2a and Section C, line 19a.
Federal Tax Reform – In general, California R&TC does not conform to all of the changes under the TCJA. For adjustments due to the TCJA, see the specific line instructions for the following items:
Combat zone extended to Egypt’s Sinai Peninsula
Moving expenses and reimbursements
Limitation on deduction of business interest
Limitation on employer’s deduction for fringe benefit expenses
Limitation on wagering losses
Sexual harassment settlements
Global intangible low-taxed income (GILTI) under IRC Section 951A
Qualified equity grants
Expanded use of IRC Section 529 account funds
Living expenses for members of Congress
Limitation on state and local tax deduction
Mortgage and home equity indebtedness interest deduction
Limitation on charitable contribution deduction
College athletic seating rights
Casualty or theft loss(es)
Miscellaneous itemized deductions
Registered Domestic Partners (RDPs) – RDPs will compute their limitations based on the combined federal adjusted gross income (AGI) of each partner’s individual tax return filed with the Internal Revenue Service (IRS).
For column A, Part I and Part II, combine each line item of your federal amounts from each partner’s individual federal tax return. For more information on RDPs, get FTB Pub. 737, Tax Information for Registered Domestic Partners. The combined federal AGI used to compute limitations is different from the recalculated federal AGI used on Form 540, line 13. In situations where RDPs have no RDP adjustments, these amounts may be the same.
Military Personnel – Servicemembers domiciled outside of California, and their spouses/RDPs may exclude the servicemember’s military compensation from gross income when computing the tax rate on nonmilitary income. Requirements for military servicemembers domiciled in California remain unchanged. Military servicemembers domiciled in California must include their military pay in total income. In addition, they must include their military pay as California source income when stationed in California. However, military pay is not California source income when a servicemember is permanently stationed outside of California. Beginning 2009, the federal Military Spouses Residency Relief Act may affect the California income tax filing requirements for spouses of military personnel.
The federal Veterans Auto and Education Improvement Act (VAEIA) of 2022 was enacted on January 5, 2023, and made amendments to the federal Servicemembers Civil Relief Act (SCRA). California conforms to the following VAEIA provisions:
A spouse of a servicemember shall neither lose nor acquire a residence or domicile for purposes of taxation with respect to the person, personal property, or income of the spouse by reason of being absent or present in any tax jurisdiction of the United States solely to be with the servicemember in compliance with the servicemember's military orders.
For any taxable year of the marriage, a servicemember and the spouse of such servicemember may elect to use for purposes of taxation, regardless of the date on which the marriage of the servicemember and the spouse occurred, any of the following: The residence or domicile of the servicemember. The residence or domicile of the spouse. The permanent duty station of the servicemember.
For more information, get Form 540NR, California Nonresident or Part-Year Resident Income Tax Return, and FTB Pub. 1032, Tax Information for Military Personnel.
Single Member Limited Liability Company (SMLLC) – If you are a single member limited liability company, that is organized or doing business in California, or registered with the California Secretary of State (SOS), you are required to file Form 568, Limited Liability Company Return of Income, pay the annual tax and LLC Fee (if applicable), in addition to filing your tax return. Get Form 568, Limited Liability Company Tax Booklet, for more information.
Use Schedule CA (540) to make adjustments to your federal adjusted gross income and to your federal itemized deductions using California law.
Enter in Section A, line 1a through line 7, and Section B, line 1 through line 9a the same amounts entered on your federal Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors, line 1a through line 7; and federal Schedule 1 (Form 1040), Additional Income and Adjustments to Income, line 1 through line 9.
Combine the amounts in Section A, line 1z through line 7, and Section B, line 1 through line 7 and line 9a.
Enter the same amounts entered on your federal Schedule 1 (Form 1040), line 11 through line 18 and line 20 through line 25.
Enter on line 19a the same amount entered on your federal Schedule 1 (Form 1040), line 19a. Enter on line 19b the social security number (SSN) or individual taxpayer identification number (ITIN) and last name of the person to whom you paid alimony.
Add line 11 through line 23 and line 25.
Subtract line 26 from line 10. This amount should match the amount entered on federal Form 1040 or 1040-SR, line 11.
Use these columns to enter subtractions and additions to the federal amounts in column A that are necessary because of differences between California and federal law. Enter all amounts as positive numbers unless instructed otherwise.
You may need one or more of the following FTB publications to complete column B and column C:
1001, Supplemental Guidelines to California Adjustments
1005, Pension and Annuity Guidelines
1031, Guidelines for Determining Resident Status
1032, Tax Information for Military Personnel
1100, Taxation of Nonresidents and Individuals Who Change Residency
To get forms and publications, go to ftb.ca.gov/forms .
Generally, you will not make any adjustments on these lines. If you did not receive any of the following types of income, make no entry on line 1a through line 1i and line 1z in either column B or column C.
Active duty military pay – Special rules apply to active duty military taxpayers. Get FTB Pub. 1032 for more information.
Combat zone foreign earned income exclusion – For taxable years beginning on and after January 1, 2018, California does not conform to the federal foreign earned income exclusion for amounts received by certain U.S. citizens or resident aliens with an abode in the U.S., specifically contractors or employees of contractors supporting the U.S. Armed Forces in designated combat zones. Enter the amount excluded from federal income on Part I, Section B, line 8d, column C.
Native American earned income exemption – California does not tax federally recognized tribal members living in California Indian country who earn income from any federally recognized California Indian country. Military compensation is considered income from reservation sources. Enrolled members who receive reservation sourced per capita income must reside in their affiliated tribe’s Indian country to qualify for tax exempt status. Enter on applicable line 1a through line 1h, column B the earnings included in federal income that are exempt for California. Attach form FTB 3504, Enrolled Tribal Member Certification, to Form 540. For more information, get form FTB 3504.
Tax treaty – If you excluded income exempted by U.S. tax treaties on your federal Form 1040 or 1040-SR (unless specifically exempted for state purposes), enter the excluded amount on applicable line 1a through line 1h, column C.
Sick pay received under the Federal Insurance Contributions Act and Railroad Retirement Act – California excludes this item from income. Enter on line 1a or line 1h as applicable, column B the amount of sick pay benefits received under the Federal Insurance Contributions Act and Railroad Retirement Act included in the amount in column A.
Employees and independent contractors – Some taxpayers may be classified as independent contractors for federal purposes and as employees for California purposes. If the taxpayer is classified as an employee for California purposes, enter the amount reported as gross income of the business from federal Schedule C (Form 1040), Profit or Loss from Business, line 7, as wages on line 1a, column C.
Income exclusion for In-Home Supportive Services (IHSS) supplementary payments – If you are an IHSS provider who received IHSS supplementary payments that were included in federal wages, enter the IHSS supplementary payments on line 1d, column B. IHSS providers only receive a supplementary payment if they paid a sales tax on the IHSS services they provide. The supplementary payment is equal to the sales tax paid plus any increase in the federal payroll withholding paid due to the supplementary payment.
Ridesharing fringe benefit differences – Under federal law, certain qualified transportation benefits are excluded from gross income. Under the R&TC, there are no monthly limits for the exclusion of these benefits and California’s definitions are more expansive. Enter the amount of ridesharing benefits received and included in federal income on line 1h, column B.
Exclusion for compensation from exercising a California Qualified Stock Option (CQSO) – To claim this exclusion:
Your earned income is $40,000 or less from the corporation granting the CQSO.
The market value of the options granted to you must be less than $100,000.
The total number of shares must be 1,000 or less.
The corporation issuing the stock must designate that the stock issued is a CQSO at the time the option is granted.
If you included an amount qualifying for this exclusion in federal income, enter that amount on line 1h, column B.
Employer health savings account (HSA) contribution – Enter the amount of any employer HSA contribution from federal Form W-2, Wage and Tax Statement, box 12, code W on line 1h, column C.
Combat zone extended to Egypt’s Sinai Peninsula – Federal law extended combat zone tax benefits to the Sinai Peninsula of Egypt. California law does not conform. Enter the amount of combat pay excluded from federal income on line 1i, column C. Get FTB Pub. 1032 for more information.
If you did not receive any of the kinds of income listed (within this line instructions), make no entry on this line in either column B or column C.
Enter in column B the interest you received from:
U.S. savings bonds (except for interest from series EE U.S. savings bonds issued after 1989 that qualified for the Education Savings Bond Program exclusion).
U.S. Treasury bills, notes, and bonds.
Any other bonds or obligations of the United States and its territories.
Interest from Ottoman Turkish Empire settlement payments.
Interest income from children under age 19 or full-time students under age 24 included on the child’s federal tax return and reported on the California tax return by the parent. For more information, get form FTB 3803, Parents’ Election to Report Child’s Interest and Dividends.
Certain mutual funds pay “exempt-interest dividends.” If the mutual fund has at least 50% of its assets invested in tax-exempt U.S. obligations and/or in California or its municipal obligations, that amount of dividend is exempt from California tax. The proportion of dividends that are tax‑exempt will be shown on your annual statement or statement issued with federal Form 1099-DIV, Dividends and Distributions. For more information, get FTB Pub. 1001.
Enter in column C the interest you identified as tax-exempt interest on your federal Form 1040 or 1040-SR, line 2a, and which you received from:
The federally exempt interest dividends from other states, or their municipal obligations and/or from mutual funds that do not meet the 50% rule as previously discussed.
Non-California state bonds.
Non-California municipal bonds issued by a county, city, town, or other local government unit.
Obligations of the District of Columbia issued after December 27, 1973.
Non-California bonds if the interest was passed through to you from S corporations, trusts, partnerships, or Limited Liability Companies (LLCs).
Interest or other earnings earned from an HSA are not treated as tax deferred. Interest or earnings in an HSA are taxable in the year earned.
Interest on any bond or other obligation issued by the Government of American Samoa.
Interest income from children under age 19 or full-time students under age 24 included on the parent’s federal tax return and reported on the California tax return by the child.
Make no entries in either column B or column C for interest you earned on Federal National Mortgage Association (Fannie Mae) Bonds, Government National Mortgage Association (Ginnie Mae) Bonds, and Federal Home Loan Mortgage Corporations (FHLMC) securities, or grants paid to low income individuals.
Get FTB Pub. 1001 if you received interest income from the items listed (within this line instructions) that is passed through to you from S corporations, trusts, estates, partnerships, or LLCs.
Generally, no difference exists between the amount of dividends reported in column A and the amount reported using California law. However, California taxes dividends derived from other states and their municipal obligations.
Add dividends received from the following and enter in column B:
Dividend income from children under age 19 or full-time students under age 24 included on the parent’s or child’s federal tax return and reported on the California tax return by the opposite taxpayer. For more information, get form FTB 3803.
Add dividends received from the following and enter in column C:
Controlled foreign corporation (CFC) dividends in the year distributed.
Regulated investment company (RIC) capital gains in the year distributed.
Distributions of pre-1987 earnings from an S corporation.
Dividend income from children under age 19 or full-time students under age 24 excluded on the parent’s or child’s federal tax return and reported on the California tax return by the opposite taxpayer. For more information, get form FTB 3803.
Get FTB Pub. 1001 if you received dividends from :
Non-cash patronage dividends from farmers’ cooperatives or mutual associations.
A CFC.
Distributions of pre-1987 earnings from S corporations.
Undistributed capital gains for RIC shareholders.
Generally, no adjustments are made on this line. However, there may be significant differences in the taxable amount of a distribution (including a distribution from conversion of a traditional IRA to a Roth IRA), depending on when you made your contributions to the IRA. Differences also occur if your California IRA deductions were different from your federal deductions because of differences between California and federal self-employment income.
If the taxable amount using California law is:
Less than the amount taxable under federal law, enter the difference in column B.
More than the amount taxable under federal law, enter the difference in column C.
Get FTB Pub. 1005 for more information and worksheets for figuring the adjustment to enter on this line, if any.
If you have an IRA basis and were a nonresident in prior years, you may need to restate your California IRA basis. Get FTB Pub. 1100 for more information.
Coverdell Education Savings Account (ESA) formerly known as Education (ED) IRA – If column A includes a taxable distribution from an ED IRA, you may owe additional tax on that amount. Get form FTB 3805P, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.
Generally, no adjustments are made on this line. However, if you received Tier 2 railroad retirement benefits or partially taxable distributions from a pension plan, you may need to make the following adjustments.
If you received a federal Form RRB-1099-R, Annuities or Pensions by the Railroad Retirement Board, for railroad retirement benefits and included all or part of these benefits in taxable income in column A, enter the taxable benefit amount in column B.
If you began receiving a retirement annuity between July 1, 1986, and January 1, 1987, and elected to use the three-year rule for California purposes and the annuity rules for federal purposes, enter in column C the amount of the annuity payments you excluded for federal purposes.
You may have to pay an additional tax if you received a taxable distribution from a qualified retirement plan before reaching age 59½ and the distribution was not rolled over into another qualified plan. Get form FTB 3805P for more information.
California excludes U.S. social security benefits or equivalent Tier 1 railroad retirement benefits from taxable income. Enter in column B the amount of taxable U.S. social security benefits or equivalent Tier 1 railroad retirement benefits shown on line 6b, column A.
Generally, no adjustments are made on this line. California taxes long and short term capital gains as regular income. No special rate for long term capital gains exists. However, the California basis of the assets listed (within this line instructions) may be different from the federal basis due to differences between California and federal laws. If there are differences, use Schedule D (540), California Capital Gain or Loss Adjustment, to calculate the amount to enter on line 7.
Gain or loss from the sale of investments inside an HSA.
Gain on sale of qualified small business stock under IRC Section 1045 and IRC Section 1202.
Basis amounts resulting from differences between California and federal law in prior years.
Gain or loss on stock and bond transactions.
Installment sale gain reported on form FTB 3805E, Installment Sale Income.
Gain on the sale of personal residence where depreciation was allowable.
Pass-through gain or loss from partnerships, fiduciaries, S corporations, or LLCs.
Capital loss carryover from your 2023 California Schedule D (540).
Capital gain from children under age 19 or full-time students under age 24 included on the parent’s or child’s federal tax return and reported on the California tax return by the opposite taxpayer. For more information, get form FTB 3803.
Get FTB Pub. 1001 for more information about :
Disposition of S corporation stock acquired before 1987.
Capital gain exclusion for sale of principal residence by a surviving spouse.
Gain on sale or disposition of qualified assisted housing development to low-income residents or to specified entities maintaining housing for low‑income residents.
Undistributed capital gain for RIC shareholders.
Gain or loss on the sale of property inherited before January 1, 1987.
Capital loss carrybacks.
California does not tax the state income tax refund. Enter in column B the amount of state tax refund entered in column A.
Under federal law, the TCJA, alimony and separate maintenance payments are not includable in the income of the receiving spouse, if made under any divorce or separation agreement executed after December 31, 2018, or executed on or before December 31, 2018 and modified after that date (if the modification expressly provides that the amendments apply). California law does not conform. If you received alimony not included in your federal income, enter the alimony received in column C.
If you are a nonresident alien and received alimony not included in your federal income, enter the alimony on this line in column C.
Adjustments to federal business income or loss you reported in column A generally are necessary because of the difference between California and federal law relating to depreciation methods, special credits, and accelerated write-offs. As a result, the recovery period or basis used to figure California depreciation may be different from the amount used for federal purposes.
Adjustments are figured on form FTB 3885A, Depreciation and Amortization Adjustments, and are most commonly necessary because of the following:
Before January 1, 1987, California did not allow depreciation under the federal accelerated cost recovery system. Continue to figure California depreciation for those assets in the same manner as prior years.
On or after January 1, 1987, California provides special credits and accelerated write-offs that affect the California basis of qualifying assets. Refer to the bulleted list below.
Use form FTB 3801, Passive Activity Loss Limitations, to figure the total adjustment for line 3 if you have:
One or more passive activities that produce a loss.
One or more passive activities that produce a loss and any nonpassive activity reported on federal Schedule C (Form 1040).
Use form FTB 3885A to figure the total adjustment for line 3 if you have:
Only nonpassive activities which produce either gains or losses (or combination of gains and losses).
Passive activities that produce gains.
Other loan forgiveness – Under federal law, the CAA, 2021, allows deductions for eligible expenses paid for with covered loan amounts. California law conforms to this federal provision, with modifications. For California purposes, if you are an ineligible entity and deducted eligible expenses for federal purposes, enter the total amount of those expenses deducted on line 3, column C.
Paycheck Protection Program loans forgiveness – Under federal law, the CAA, 2021, allows deductions for eligible expenses paid for with covered loan amounts. California law conforms to this federal provision with modifications. For California purposes, if you are an ineligible entity and deducted eligible expenses for federal purposes, enter the total amount of those expenses deducted on line 3, column C.
Also, the ARPA expands PPP eligibility to include “additional covered nonprofit entities” which includes certain Code 501(c) nonprofit organizations and Internet-only news publishers and Internet-only periodical publishers. California law does not conform to this expansion of PPP eligibility. If you met the PPP eligibility requirements and excluded the amount from gross income for federal purposes, enter the excluded amount on line 3, column C.
Shuttered venue operator grant – Under federal law, the CAA, 2021, allows deductions for eligible expenses paid for with grant amounts. California law conforms to this federal provision with modifications. For California purposes, if you are an ineligible entity and deducted eligible expenses for federal purposes, enter the total amount of those expenses deducted on line 3, column C.
Employees and independent contractors – Some taxpayers may be classified as independent contractors for federal purposes and as employees for California purposes. If the taxpayer is classified as an employee for California purposes, enter the amount of federal business income from line 3, column A, on line 3, column B. Enter the amount of federal business loss from line 3, column A, on line 3, column C.
Commercial cannabis activity – Under federal law, deductions for business expenses of a trade or business paid or incurred during the taxable year in conducting commercial cannabis activity are disallowed. California law does not conform. California allows cannabis business licensed under CA MAUCRSA to claim these expenses. Enter the amount of these expenses on line 3, column B.
Limitation on deduction of business interest – Under federal law, every business, regardless of its form, is generally subject to a disallowance of a deduction for net interest expense in excess of 30% of the business’s adjustable taxable income. California law does not conform. Figure the difference between the amounts allowed using federal law and California law. Enter the difference on line 3, column B.
Limitation on employer’s deduction for fringe benefit expenses – Under federal law, deductions for entertainment expenses are disallowed; the current 50% limit on the deductibility of business meals is expanded to meals provided through an in-house cafeteria or otherwise on the premises of the employer; deductions for employee transportation fringe benefits (e.g., parking and mass transit) are denied; and no deduction is allowed for transportation expenses that are the equivalent of commuting for employees (e.g., between the employee’s home and the workplace), except as provided for the safety of the employee. California law does not conform. Figure the difference between the amounts allowed using federal law and California law. Enter the difference on line 3, column B or column C.
Limitation on wagering losses – Under federal law, all deductions for expenses incurred in carrying out wagering transactions, and not just gambling losses, are limited to the extent of gambling winnings. California law does not conform. Figure the difference between the amounts allowed using federal law and California law. Enter the difference on line 3, column B.
Sexual harassment settlements – Under federal law, no deduction is allowed for any settlement, payout, or attorney fees related to sexual harassment or sexual abuse if such payments are subject to a nondisclosure agreement. California law does not conform. Enter the amount received and included in federal income on line 3, column B.
Penalty assessed by professional sports league – California does not allow a business expense deduction for any fine or penalty paid or incurred by an owner of a professional sports franchise assessed or imposed by the professional sports league that includes that franchise. If the fine or penalty was deducted for federal purposes, enter this amount on line 3, column C.
Business expense deduction disallowance – California disallows a deduction for a business expense related to a payment to the Edge College and Career Network, LLC, to a taxpayer who meets all of the following:
They are charged as a defendant in any of several specified criminal complaints as listed in R&TC Section 17275.4.
There is a final determination of their guilt with regard to a violation of any offense arising out of that criminal complaint.
There is a finding that they took the deduction unlawfully.
For more information, see R&TC Section 17275.4. Enter the amount of this deduction on line 3, column C.
Get FTB Pub. 1001 for more information about:
Business, trade, or profession carried on within California that is an integral part of a unitary business carried on both within and outside California.
Pro-rata share of income received from a CFC by a U.S. shareholder.
Property acquired prior to becoming a California resident.
Sales or use tax credit for property used in a former Enterprise Zone (EZ), Local Agency Military Base Recovery Area (LAMBRA), or Targeted Tax Area (TTA).
Reduced recovery periods for fruit-bearing grapevines replaced in a California vineyard on or after January 1, 1992, as a result of phylloxera infestation; or on or after January 1, 1997, as a result of Pierce’s disease.
Expenditures for tertiary injectants.
Property placed in service on an Indian reservation after December 31, 2017, and before January 1, 2022.
Amortization of pollution control facilities.
Discharge of real property business indebtedness.
Vehicles used in an employer-sponsored ridesharing program.
An enhanced oil recovery system.
Joint Strike Fighter property costs.
The cost of making a business accessible to disabled individuals.
Property for which you received an energy conservation subsidy from a public utility on or after January 1, 1995, and before January 1, 1997.
Research and experimental expenditures.
Reduction of capitalized costs attributable to the federal Work Opportunity Credit.
Wages paid in a former EZ, LAMBRA, Manufacturing Enhancement Area (MEA), or TTA.
Abandonment or tax recoupment fees for open-space easements and timberland preserves.
Research expense.
Employer wage expense for the federal Work Opportunity Credit.
Pro-rata share of deductions received from a CFC by a U.S. shareholder.
Interest paid on indebtedness in connection with company-owned life insurance policies.
Premiums paid on life insurance policies, annuities, or endowment contracts issued after June 8, 1997, where the owner of the business is directly or indirectly a policy beneficiary.
Commercial Revitalization Deductions for Renewal Communities.
Small Employer Health Insurance Credit.
Generally, no adjustments are made on this line. However, the California basis of your other assets may differ from your federal basis due to differences between California and federal law. Therefore, you may have to adjust the amount of other gains or losses. Get Schedule D-1, Sales of Business Property.
Adjustments to federal income or loss you reported in column A generally are necessary because of the difference between California and federal law relating to depreciation methods, special credits, and accelerated write-offs. As a result, the recovery period or basis used to figure California depreciation may be different from the recovery period or amount used for federal. For more information, see the instructions for Part I, Column B and Column C, Section B, line 3.
California law does not conform to federal law for material participation in rental real estate activities. Beginning in 1994, and for federal purposes only, rental real estate activities conducted by persons in real property business are not automatically treated as passive activities. Get form FTB 3801 for more information.
Use form FTB 3801 to figure the total adjustment for line 5 if you have:
One or more passive activities that produce a loss.
One or more passive activities that produce a loss and any nonpassive activity reported on federal Schedule E (Form 1040), Supplemental Income and Loss.
Use form FTB 3885A to figure the total adjustment for line 5 if you have:
Only nonpassive activities which produce either gains or losses (or combination of gains and losses).
Passive activities that produce gains.
LLCs that are classified as partnerships for California purposes and limited liability partnerships (LLPs) are subject to the same rules as other partnerships. LLCs report distributive items to members on Schedule K‑1 (568), Member’s Share of Income, Deductions, Credits, etc. LLPs report to partners on Schedule K-1 (565), Partner’s Share of Income, Deductions, Credits, etc.
Get FTB Pub. 1001 for more information about accumulation distributions to beneficiaries for which the trust was not required to pay California tax because the beneficiary’s interest was contingent.
Adjustments to federal income or loss you report in column A generally are necessary because of the difference between California and federal law relating to depreciation methods, special credits, NOLs, and accelerated write‑offs. As a result, the recovery period or basis you use to figure California depreciation may be different from the amount used for federal purposes, and you may need to make an adjustment to your farm income or loss. For more information, see the instructions for Part I, Column B and Column C, Section B, line 3.
Use form FTB 3801 to figure the total adjustment for line 6 if you have:
One or more passive activities that produce a loss.
One or more passive activities that produce a loss and any nonpassive activity reported on federal Schedule F (Form 1040), Profit or Loss From Farming.
Use form FTB 3885A to figure the total adjustment for line 6 if you have:
Only nonpassive activities which produce either gains or losses (or combination of gains and losses).
Passive activities that produce gains.
California excludes unemployment compensation from taxable income. Enter on line 7, column B the amount of unemployment compensation shown in column A.
Paid Family Leave Insurance (PFL) benefits, also known as Family Temporary Disability Insurance – Payments received from the PFL Program are reported on federal Form 1099-G, Certain Government Payments. California excludes payments received from the PFL program from taxable income. Enter on line 7, column B the amount of PFL payments shown in column A. For more information, get FTB Pub. 1001.
a. Federal Net Operating Loss – Enter the amount of the federal NOL included on line 8a, column A, as a positive number in column C. Get form FTB 3805V to figure the allowable California NOL.
b. Gambling
California lottery winnings – California excludes California lottery winnings from taxable income. Enter in column B the amount of California lottery winnings included in the federal amount on line 8b, column A.
Make no adjustment for lottery winnings from other states. They are taxable by California. If you reduced gambling income for California lottery income, you may need to reduce the losses included in the federal itemized deductions on Part II, line 16, column A. Enter these losses on Part II, line 16, column B.
c. Cancellation of Debt
Mortgage forgiveness debt relief – California law does not conform to federal law regarding the exclusion of income from discharge of indebtedness from the disposition of your principal residence occurring after December 31, 2017. Enter the amount of discharge on line 8c, column C.
Certain employer payments of student loans – California does not conform to the CARES Act regarding the exclusion of student loan payments made on behalf of an employee by an employer. Enter the amount of loan payment on line 8c, column C.
d. Foreign Earned Income Exclusion from Federal Form 2555
Federal foreign earned income and housing exclusion – Enter in column C, as a positive number, the amount excluded from federal income on federal Schedule 1 (Form 1040), line 8d.
Combat zone foreign earned income exclusion – Enter the amount excluded from federal income on line 8d, column C, as a positive number.
e. Income from Federal Form 8853
Rollover from an Archer MSA to an HSA – Since California does not recognize HSAs, a rollover from an Archer MSA to an HSA is treated as distribution not used for qualified medical expenses. For California, the distribution is included in California taxable income and the additional 12.5% tax applies. For more information, get form FTB 3805P.
Enter the amount rolled over from an Archer MSA to an HSA on line 8e, column C.
MSA distribution used for menstrual care products – For Archer MSA purposes, California does not conform to the inclusion of amounts paid for menstrual care products as qualified medical expenses. Enter the amount of MSA distribution used to pay for menstrual care products on line 8e, column C.
f. Income from Federal Form 8889
HSA distributions for unqualified medical expense – Distributions from an HSA not used for qualified medical expenses, and included in federal income, are not taxable for California purposes. Enter the distribution not used for qualified medical expenses on line 8f, column B.
k. Stock Options
Qualified equity grants – California law does not conform to federal law regarding the election to defer the recognition of income attributable to qualified stock. If you elected to defer income for federal purposes, make an adjustment on line 8k, column C.
n. IRC Section 951(a) Inclusion – Under federal law, if you are a U.S. shareholder of a CFC, you must include IRC Section 951(a) amount in your income. California law does not conform. If you included the amount as income for federal purposes on line 8n, column A, enter the amount on line 8n, column B.
o. IRC Section 951A(a) Inclusion – Under federal law, if you are a U.S. shareholder of a CFC, you must include your GILTI in your income. California law does not conform. If you included GILTI as income for federal purposes on line 8o, column A, enter the amount on line 8o, column B.
p. IRC Section 461(l) Excess Business Loss Adjustment – For taxable years beginning after December 31, 2018, California law generally conforms to the changes under the TCJA in regard to the disallowance of excess business loss deductions of non-corporate taxpayers. For California purposes, any disallowed loss will be treated as a carryover excess business loss instead of an NOL carryover for the subsequent taxable year. Also, California law does not conform to amendments under the CARES Act, the ARPA, and the Inflation Reduction Act of 2022. See General Information for more information.
If you are a noncorporate taxpayer and your net losses from all of your trades or businesses are more than $305,000 ($610,000 for married/RDP taxpayers filing a joint return), get form FTB 3461 to figure the excess business loss adjustment for California purposes. Enter the amount from form FTB 3461, line 16 or line 17, whichever applies, on line 8p, column C. Attach form FTB 3461 to the tax return.
Enter the amount of the federal excess business loss adjustment included on line 8p, column A, on line 8p, column B.
See line 8z for instructions on excess business losses carryover from prior years.
z. Other Income
Identify the type of income reported in the space provided. If there is more than one item to report on line 8z, attach a statement that lists each item and enter the total of all individual items in column B or column C as instructed below.
Wildfire relief payment – Federal law allows gross income exclusion for any amount received by an individual as a qualified wildfire relief payment as described in the Federal Disaster Tax Relief Act of 2023, Section 3. California law does not conform. If any qualified amount was excluded from income for federal purposes and California law provides no similar exclusion, enter that amount on line 8z, column C. For specific wildfire relief payments excluded for California purposes, see General Information .
Special rules for certain distributions from qualified IRC Section 529 tuition plans – The CAA, 2023, allows qualified IRC Section 529 tuition plans that have been maintained for 15 years to rollover to a Roth IRA without a tax or penalty. Under the federal law, rollover distributions from an IRC Section 529 plan to a Roth IRA after December 31, 2023, will be treated in the same manner as the earnings and contributions of a Roth IRA. California law does not conform to this federal provision. Rollover distribution from an IRC Section 529 plan to a Roth IRA is includible in California taxable income. For California purposes, enter the rollover distribution amount from an IRC Section 529 plan to a Roth IRA that was excluded from income for federal purposes on line 8z, column C.
Wildfire mitigation payment – California law allows a qualified taxpayer an exclusion from gross income for any amount received as a California qualified wildfire loss mitigation payment through the California Wildfire Mitigation Financial Assistance Program. If any qualified amount was included as income for federal purposes, enter the amount on line 8z, column B.
California HOPE for Children Trust Account Program – California law allows an exclusion from gross income for any funds deposited, any investment returns accrued, and any accrued interest in a HOPE trust account and for any funds from a HOPE trust account that is withdrawn or transferred by an eligible youth. If you included an amount qualifying for this exclusion as income for federal purposes, enter the amount on line 8z, column B.
Interagency Council on Homelessness payment exclusion – California law allows an exclusion from gross income for payments received pursuant to the California Welfare and Institutions Code Section 8257 by members of the Interagency Council on Homelessness, its advisory committee, or its working groups who are or have been homeless. If you included this amount as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.
Kincade wildfire exclusion – California law allows a qualified taxpayer an exclusion from gross income for any qualified amount received in a settlement from PG&E Company or its subsidiary relating to the 2019 Kincade Fire. If any qualified amount was included as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.
Discharge of student fees – California law allows an exclusion from gross income for any amount of unpaid fees due or owed by a student to a community college that was discharged. If you include the amount discharged as income for federal tax purposes on line 8z, column A, enter the amount on line 8z, column B.
Guaranteed income pilot program payment exclusion – California law allows an exclusion from gross income for any payments received by an individual from a guaranteed income pilot program or project that receives a grant pursuant to California Welfare and Institution Code Section 18997. If you included this amount as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.
Small business and nonprofit COVID-19 supplemental paid sick leave relief – California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program that is established by Section 12100.975 of the Government Code. If you included an amount qualifying for this exclusion as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.
Turf replacement water conservation program – California law allows an exclusion from gross income for any amount received as a rebate, voucher, or other financial incentive issued by a public water system, local government, or state agency for participation in a turf replacement water conservation program. If any amount was included as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.
Fire Victims Trust exclusion – California law allows a qualified taxpayer an exclusion from gross income for any amount received from the Fire Victims Trust. If any amount was included as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.
Thomas and Woolsey wildfires exclusion – California law allows a qualified taxpayer an exclusion from gross income for any amount received in a settlement from Southern California Edison for claims relating to the 2017 Thomas Fire or the 2018 Woolsey Fire. If any amount was included as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.
Excess business losses carryover from prior years – If in the current year, the taxpayer has enough business income to fully offset all of the excess business loss carryover from prior year, then the carryover balance is applied to offset the business income. Refer to form FTB 3461 instructions for line 14b and line 15 for further instructions. Enter the excess business losses carryover from prior years on line 8z, column B, and write "excess business losses carryover from prior years" on the space provided for line 8z.
California microbusiness COVID-19 relief grant – California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Microbusiness COVID-19 Relief Program that is administered by CalOSBA. Federal law has no similar exclusion. Enter on line 8z, column B the amount of this type of income.
California venues grant – California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Venues Grant Program that is administered by the CalOSBA. Federal law has no similar exclusion. Enter on line 8z, column B the amount of this type of income.
Small business COVID-19 relief grant – California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the COVID-19 Relief Grant under Executive Order No. E 20/21-182 and the California Small Business COVID-19 Relief Grant Program established by Section 12100.83 of the Government Code. If you included any amount as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.
Income exclusion for rent forgiveness – If for federal purposes gross income includes a tenant’s rent liability that is forgiven by a landlord or rent forgiveness provided through funds grantees received as a direct allocation from the Secretary of the Treasury, enter on line 8z, column B the amount of this type of income included on line 8z, column A.
Expanded use of IRC Section 529 account funds – California law does not conform to federal law regarding the IRC Section 529 account funding for elementary and secondary education or to the maximum distribution amount. If the amount was excluded for federal purposes, make an adjustment on line 8z, column C.
Native American earned income exemption – California does not tax federally recognized tribal members living in California Indian country who earn income from any federally recognized California Indian country. Military compensation is considered income from reservation sources. Enrolled members who receive reservation sourced per capita income must reside in their affiliated tribe’s Indian country to qualify for tax exempt status. For more information, get form FTB 3504. Enter on line 8z, column B the income included in federal income that is exempt for California and write “FTB 3504” on line 8z. Attach form FTB 3504 to Form 540.
Tax treaty – If you are claiming a tax treaty exemption on federal Schedule 1 (Form 1040), enter that amount on line 8z, column C as a positive number, unless it is specifically exempted for state purposes.
Parents’ election to report child’s interest and dividends – California law conforms to federal law for elections made by parents reporting their child’s interest and dividends. Parents may elect to report their child’s income on their California income tax return by completing form FTB 3803. If you make this election, the child will not have to file a tax return. You may report your child’s income on your California income tax return even if you do not do so on your federal income tax return.
If the amount of your child’s income you are reporting on your California income tax return is different than the amount you reported on your federal income tax return, enter the difference on line 8z, column B or column C and write “FTB 3803” on line 8z. Get form FTB 3803 for more information.
Reward from a crime hotline – Enter in column B the amount of a reward authorized by a government agency received from a crime hotline established by a government agency or nonprofit organization that is included in the amount on line 8z, column A.
You may not make this adjustment if you are an employee of the hotline or someone who sponsors rewards for the hotline.
Beverage container recycling income – Enter in column B the amount of recycling income included in the amount on line 8z, column A.
Rebates or vouchers from a local water agency, energy agency, or energy supplier – California law allows an income exclusion for rebates or vouchers from a local water agency, energy agency, or energy supplier for the purchase and installation of water conservation appliances and devices. Enter in column B the amount of this type of income included in the amount on line 8z, column A.
Financial incentive for seismic improvement – California law allows an income exclusion for loan forgiveness, grant, credit, rebate, voucher, or other financial incentive issued by the California Residential Mitigation Program or California Earthquake Authority to assist a residential property owner or occupant with expenses paid, or obligation incurred for earthquake loss mitigation. Enter in column B the amount of this type of income included in the amount on line 8z, column A.
Original issue discount (OID) for debt instruments issued in 1985 and 1986 – In the year of sale or other disposition, you must recognize the difference between the amount reported on your federal tax return and the amount reported for California purposes. Issuers : Enter the difference between the federal deductible amount and the California deductible amount on line 8z, column B. Holders : Enter the difference between the amount included in federal gross income and the amount included for California purposes on line 8z, column C.
Foreign income of nonresident aliens – Adjust federal income to reflect worldwide income computed under California law. Enter losses from foreign sources on line 8z, column B. Enter foreign source income on line 8z, column C.
Cost-share payments received by forest landowners – Enter on line 8z, column B the cost-share payments received from the California Department of Forestry and Fire Protection under the California Forest Improvement Act of 1978 or from the United States Department of Agriculture, Forest Service, under the Forest Stewardship Program and the Stewardship Incentives Program, pursuant to the federal Cooperative Forestry Assistance Act.
Coverdell ESA distributions – If you received a distribution from a Coverdell ESA, enter the difference between the federal taxable amount and the California taxable amount on line 8z, column B or column C.
Grants paid to low-income individuals – California law excludes grants paid to low-income individuals to construct or retrofit buildings to make them more energy efficient. Federal law has no similar exclusion. Enter on line 8z, column B the amount of this type of income.
California National Guard Surviving Spouse & Children Relief Act of 2004 – Death benefits received from the State of California by a surviving spouse/RDP or member-designated beneficiary of certain military personnel killed in the performance of duty are excluded from gross income. Military personnel include the California National Guard, State Military Reserve, or the Naval Militia. If you reported a death benefit on line 8z, column A, enter the death benefit amount in column B.
Ottoman Turkish Empire settlement payments – If you received settlement payments as a person persecuted by the regime that was in control of the Ottoman Turkish Empire from 1915 until 1923, your gross income does not include those excludable settlement payments, or interest, received by you, your heirs, or your estate for payments received on or after January 1, 2005. If you reported settlement payments on line 8z, column A, enter the amount of settlement payments in column B.
If you have a California disaster loss carryover deduction and there is income in the current taxable year, enter the total amount of disaster loss carryover deduction from your 2024 form FTB 3805V, Part III, line 2, column (f), as a positive number in column B.
NOL attributable to a qualified disaster – If you deduct a 2024 disaster loss in the 2024 taxable year and have remaining disaster loss that results in an NOL, the NOL can be carried forward. Get form FTB 3805V for more information.
The allowable NOL carryover under California law is different from the allowable NOL carryover under federal law. If you have a California NOL carryover from prior years, enter the total allowable California NOL carryover deduction for the current year from form FTB 3805V, Part III, line 2, column (f), as a positive number in column B.
Enter in column B the total NOL figured on the following forms:
FTB 3805Z, Enterprise Zone Deduction and Credit Summary, line 3b
FTB 3807, Local Agency Military Base Recovery Area Deduction and Credit Summary, line 3b
FTB 3809, Targeted Tax Area Deduction and Credit Summary, line 3b
Add Section A, line 1z through line 7, and Section B, line 1 through line 7, line 9a and line 9b1 through line 9b3 in column B. Add Section A, line 1z through line 7, and Section B, line 1 through line 7, and line 9a in column C. Enter the totals on line 10.
California law is the same as federal law with the exception of the following:
Line 11 Educator Expenses – California law does not conform to federal law regarding educator expenses. Enter the amount from line 11, column A on line 11, column B.
Line 12 Certain Business Expenses of Reservists, Performing Artists, and Fee-Basis Government Officials – If claiming a depreciation deduction as an unreimbursed employee business expense on federal Form 2106, Employee Business Expenses, you may have an adjustment in column B or column C. For more information, get FTB Pub. 1001. Federal law eliminated the $3,000 deduction for living expenses for members of Congress while away from home. California law does not conform. Enter the amount of living expenses on line 12, column C.
Line 13 Health Savings Account Deduction – Federal law allows a deduction for contributions to an HSA account. California law does not conform. Enter the amount from line 13, column A, on line 13, column B.
Line 14 Moving Expenses – California law does not conform to federal law regarding the suspension of the deduction for moving expenses, except for members of the Armed Forces on active duty. Non-military and military taxpayers, prepare form FTB 3913. After completing form FTB 3913, if you are a non-military taxpayer and checked the "No" box on line 5 of form FTB 3913, enter the amount from form FTB 3913, line 5 on Schedule CA (540), Part I, Section A, line 1h, column C. If you are a non-military taxpayer and checked the "Yes" box on line 5 of form FTB 3913, enter the amount from form FTB 3913, line 5 on Schedule CA (540), Part I, line 14, column C.
Line 15 Deductible Part of Self-employment Tax – A taxpayer may be classified as an independent contractor for federal purposes and as an employee for California purposes. This deduction is not allowed to an employee. If for California purposes, the taxpayer is classified as an employee, an adjustment is needed in column B. Enter the amount from line 15, column A, on line 15, column B.
Line 17 Self-employed Health Insurance Deduction – A taxpayer may be classified as an independent contractor for federal purposes and as an employee for California purposes. This deduction is not allowed to an employee. If for California purposes, the taxpayer is classified as an employee, an adjustment is needed in column B. Enter the amount from line 17, column A, on line 17, column B. Note : A taxpayer classified as an employee for California purposes who makes an adjustment on this line may be able to claim this amount as a deduction for medical and dental expenses. For more information, see instructions for Part II, line 4.
Line 19a Alimony Paid – Under federal law, the TCJA, alimony and separate maintenance payments are not deductible by the payor spouse, if made under any divorce or separation agreement executed after December 31, 2018, or executed on or before December 31, 2018, and modified after that date (if the modification expressly provides that the amendments apply). California law does not conform. If you paid alimony and did not deduct it on your federal tax return, enter the alimony paid in column C. If you are a nonresident alien and did not deduct alimony on your federal tax return, enter the amount you paid in column C.
Line 19b (Recipient’s SSN/Last Name) – Enter the SSN or ITIN and last name of the person to whom you paid alimony.
Line 20 – IRA Deduction 408 election – To take the election, the federal deduction is taken on line 20, column A. The election for California will be on line 20, column B or C. Get FTB Pub. 1005 for more information. IRA age – If you report an IRA deduction on line 20, column A at age 70½ or older, include that amount deducted for federal in the total you enter on line 20, column B. Get FTB Pub. 1005 for more information. Catch-up contributions for certain individuals – If the amount reported on line 20, column A, is more than the amount allowed for California, enter the difference between the amount deducted for federal purposes and the deduction amount allowed for California on line 20, column B. Get FTB Pub. 1005 for more information.
Line 21 Student Loan Interest Deduction – California law conforms to federal law regarding student loan interest deduction except for a spouse/RDP of a non-California domiciled military taxpayer residing in a community property state. Use the Student Loan Interest Deduction Worksheet to compute the amount to enter on line 21. For more information, get FTB Pub. 1032. Student Loan Interest Deduction Worksheet Enter the total amount from Schedule CA (540), line 21, column A. If the amount on line 1 is zero, STOP. You are not allowed a deduction for California. Enter the total interest you paid in 2024 on qualified student loans but not more than $2,500 here. Add federal Schedule 1 (Form 1040), line 21 (student loan interest deduction) to federal Form 1040 or 1040-SR, line 11 (AGI). Enter the result here. Enter the amount shown below for your filing status. Single, head of household, or qualifying surviving spouse/RDP – $80,000 Married/RDP filing jointly – $165,000 Is the amount on line 3 more than the amount on line 4? No . Skip line 5 and line 6, enter -0- on line 7, and go to line 8. Yes . Subtract line 4 from line 3. Divide line 5 by $15,000 ($30,000 if married/RDP filing jointly). Enter the result as a decimal (rounded to at least three places). If the result is 1.000 or more, enter 1.000. Multiply line 2 by line 6. Student loan interest deduction. Subtract line 7 from line 2. Student loan interest adjustment. If line 1 is less than line 8, enter the difference here and on Schedule CA (540), line 21, column C.
Line 22 (Reserved) – For taxable years beginning after December 31, 2020, the tuition and fees deduction was repealed.
Line 24 – Other Adjustments b. Deductible expenses related to income reported on line 8l from the rental of personal property engaged in for profit – Generally, California law conforms with federal law and no adjustment is needed. However, if differences exist, enter the difference between the federal and California amount in column B or column C. c. Nontaxable amount of the value of Olympic and Paralympic medals and USOC prize money reported on line 8m – Federal law allows an exclusion from gross income for the value of any medal awarded or prize money received from the U.S. Olympic Committee on account of competition in the Olympic Games or Paralympic Games. The exclusion does not apply to a taxpayer for any year in which the taxpayer’s AGI exceeds $1 million, or half of that amount in the case of a married individual filing a separate return. California law does not conform. If you deducted the amount for federal purposes, enter that amount in column B. d. Reforestation amortization and expenses – California law allows a deduction for reforestation amortization and expenses with respect to qualified timber property located in California. Enter the amount from column A that is for non-California qualified timber property in column B. f. Contributions to IRC Section 501(c)(18)(D) pension plans – If the contribution amount for California is different than the federal amount, you will need to make an adjustment in column B or column C. For more information, get FTB Pub. 1005. g. Contributions by certain chaplains to IRC Section 403(b) plans – If the contribution amount for California is different than the federal amount, you will need to make an adjustment in column B or column C. For more information, get FTB Pub. 1005. i. Attorney fees and court costs you paid in connection with an award from the IRS for information you provided that helped the IRS detect tax law violations – California law does not conform to federal law regarding the deduction of these attorney fees and court costs. Enter the amount from column A in column B. j. Housing deduction from federal Form 2555 – If you claimed the foreign housing deduction for federal purposes, enter the amount from column A in column B.
Line 26 – Add line 11 through line 23 and line 25 in column B and column C.
Line 27 – Total
Subtract line 26 from line 10 in column B and column C.
Also, transfer the amount from:
Line 27, column B to Form 540, line 14. If column B is a negative number, transfer the amount as a positive number to Form 540, line 16.
Line 27, column C to Form 540, line 16. If column C is a negative number, transfer the amount as a positive number to Form 540, line 14.
Important : If you did not itemize deductions on your federal tax return but will itemize deductions on your California tax return, first complete federal Schedule A (Form 1040), Itemized Deductions. Then check the box at the top of Schedule CA (540), Part II and complete line 1 through line 30. Attach a copy of federal Schedule A (Form 1040) to your Form 540.
Enter on line 1 through line 16 the same amounts you entered on your federal Schedule A (Form 1040), line 1 through line 16.
Use these columns to enter subtractions and additions to the federal amounts in column A that are necessary because of differences between California and federal law. Enter all amounts as positive numbers unless instructed otherwise.
Employees and independent contractors – Taxpayers classified as independent contractors for federal purposes and classified as employees for California purposes may claim the amount of self-employed health insurance deduction for federal purposes as a medical and dental expense deduction for California purposes. Combine the amount paid for self-employed health insurance with other medical and dental expenses (as applicable). The total amount of the medical and dental expenses is subject to the 7.5% of federal AGI threshold. Enter the difference between the medical and dental expense deduction allowed for California and federal on line 4, column C.
HSA distributions – If you received a tax-free HSA distribution for qualified medical expenses, enter the qualified expenses paid that exceed 7.5% of federal AGI on line 4, column C.
California does not allow a deduction for state and local income tax (including limited partnership tax and income or franchise tax paid by corporations) and State Disability Insurance (SDI) or state and local general sales tax. Enter that amount on line 5a, column B.
Line 5e – The federal deduction for state and local tax is limited to $10,000 ($5,000 for married filing separately) for the aggregate of state and local income taxes and property taxes. California does not conform. If your deduction was limited under federal law, enter an adjustment on line 5e, column C for the amount over the federal limit.
California does not allow a deduction for foreign income taxes. Enter that amount on line 6, column B.
Federal law suspended the deduction for foreign property taxes. California law does not conform. Enter the amount on line 6, column C.
Generation skipping transfer tax – Tax paid on generation skipping transfers is not deductible under California law. Enter the amount of generation skipping tax included in line 6, column A on line 6, column B.
Federal law limited the mortgage interest deduction acquisition debt maximum from $1,000,000 ($500,000 for married filing separately) to $750,000 ($375,000 for married filing separately). California law does not conform. If your deduction was limited under federal law, enter an adjustment on line 8, column C for the amount over the federal limit.
Federal law suspended the deduction on up to $100,000 ($50,000 for married filing separately) for interest on home equity indebtedness, unless the loan is used to buy, build, or substantially improve the taxpayer’s home that secures the loan. California law does not conform. If your deduction was limited under the federal law, enter an adjustment on line 8, column C for the amount over the federal limit.
Mortgage interest credit – If you reduced your federal mortgage interest deduction by the amount of your mortgage interest credit (from federal Form 8396, Mortgage Interest Credit), increase your California itemized deductions by the same amount. Enter the amount of your federal mortgage interest credit on line 8, column C.
Your California deduction for investment interest expense may be different from your federal deduction. Use form FTB 3526, Investment Interest Expense Deduction, to figure the amount to enter on line 9, column B or column C.
Qualified charitable contributions – Your California deduction may be different from your federal deduction. California limits the amount of your deduction to 50% of your federal AGI. Figure the difference between the amount allowed using federal law and the amount allowed using California law. Enter the difference on line 11, column B.
College athletic seating rights – Federal law no longer allows a charitable deduction for amounts paid to an institution of higher education in exchange for college athletic seating rights. California law does not conform. Enter the amount on line 11, column C.
College Access Tax Credit – If you deducted a charitable contribution amount for the College Access Tax Credit Fund on your federal Schedule A (Form 1040) and are claiming the College Access Tax Credit on your Form 540, enter the amount used to calculate the College Access Tax Credit on line 11, column B.
Charitable contribution deduction disallowance – California disallows a charitable contribution deduction to an educational organization that is a postsecondary institution or to the Key Worldwide Foundation to a taxpayer who meets all of the following:
They are charged as a defendant in any of several specified criminal complaints as listed in R&TC Section 17275.4.
There is a final determination of their guilt with regard to a violation of any offense arising out of that criminal complaint.
There is a finding that they took the deduction unlawfully.
For more information, see R&TC Section 17275.4. Enter the amount of this deduction on line 11, column B.
Qualified charitable contributions – Your California deduction may be different from your federal deduction. California limits the amount of your deduction to 50% of your federal AGI. Figure the difference between the amount allowed using federal law and the amount allowed using California law. Enter the difference on line 12, column B.
Charitable conservation easement contributions – Under federal law, the amount of qualified conservation contribution deductions allowed is no more than 50% of federal AGI. California law limits the amount of qualified conservation contribution deductions to no more than 30% of federal AGI. Figure the difference between the deduction amount allowed using federal law and the amount allowed using California law. Enter the difference on line 12, column B.
Charitable contribution deduction disallowance – California disallows a charitable contribution deduction to an educational organization that is a postsecondary institution or to the Key Worldwide Foundation to a taxpayer who meets all of the following:
They are charged as a defendant in any of several specified criminal complaints as listed in R&TC Section 17275.4.
There is a final determination of their guilt with regard to a violation of any offense arising out of that criminal complaint.
There is a finding that they took the deduction unlawfully.
For more information, see R&TC Section 17275.4. Enter the amount of this deduction on line 12, column B.
Charitable contribution carryover deduction – If deducting a prior year charitable contribution carryover, and the California carryover is larger than the federal carryover, enter the additional amount on line 13, column C.
Qualified conservation contributions deduction carryover – Under federal law, qualified conservation contribution deductions can be carried forward for 15 years. California law limits the carryover period to 5 years. If the California carryover period for qualified conservation contribution deduction has expired, and you are deducting a charitable contribution carryover for federal purposes on line 13, column A, enter that carryover deduction amount on line 13, column B.
Carryover deduction of appreciated stock contributed to a private foundation prior to January 1, 2002 – If deducting a charitable contribution carryover of appreciated stock donated to a private operating foundation prior to January 1, 2002, and the fair market value allowed for federal purposes is larger than the basis allowed for California purposes, enter the difference on line 13, column B.
Under federal law, the personal casualty and theft loss deduction is suspended, with exception for personal casualty gains. Federal law allows a deduction for personal casualty and theft loss incurred in a federally declared disaster. California law does not conform.
California allows personal casualty and theft loss and disaster loss deductions. If you have personal casualty and theft loss and/or disaster loss, complete another federal Form 4684, Casualties and Thefts, using California amounts. Enter the difference between the federal and California amount in column B or column C.
Unreimbursed impairment-related work expenses – If you completed federal Form 2106, prepare a second set of forms reflecting your employee business expense using California amounts (i.e., following California law). Include your entertainment expenses, if any, on line 5 of federal Form 2106 for California purposes.
Generally, California law conforms with federal law and no adjustment is needed. However, differences occur when:
Assets (requiring depreciation) were placed in service before January 1, 1987. Figure the depreciation based on California law.
Federal employees were placed on temporary duty status. California does not conform to the federal provision that expanded temporary duties to include prosecution duties, in addition to investigative duties. Therefore, travel expenses paid or incurred in connection with temporary duty status (exceeding one year), involving the prosecution (or support of the prosecution) of a federal crime, should not be included in the California amount.
Compare federal Form 2106, line 10 and the form completed using California amounts. Enter the difference between the federal and California amount in column B or column C.
Gambling losses – California lottery losses are not deductible for California. Enter the amount of California lottery losses included in line 16, column A on line 16, column B.
Federal estate tax – Federal estate tax paid on income in respect of a decedent is not deductible for California. Enter the amount of federal estate tax included in line 16, column A on line 16, column B.
Claim of right – If you had to repay an amount that you included in your income in an earlier year, because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Or, if the amount you repaid is more than $3,000, you may take a credit against your tax for the year in which you repaid it, whichever results in the least tax.
If the amount repaid was not taxed by California, no deduction or credit is allowed.
Social security benefits are not taxable by California and the repayment would not qualify for claim of right deduction or credit. If you deducted the repayment of Social Security benefits on your federal tax return, enter the amount of the federal deduction on line 16, column B.
If you claimed a credit for the repayment on your federal tax return and are deducting the repayment for California, enter the allowable deduction on line 16, column C.
If you deducted the repayment on your federal tax return and are taking a credit for California, enter the amount of the federal deduction on line 16, column B. To help you determine whether to take a credit or deduction, see the Repayment section of federal Pub. 525, Taxable and Nontaxable Income. Remember to use the California tax rate in your computations. If you choose to take the credit instead of the deduction for California, add the credit amount on line 78, the total payment line, of Form 540. To the left of the total, write “IRC 1341” and the amount of the credit.
Under federal law, the deduction for miscellaneous itemized deductions subject to the 2% floor is suspended. California law does not conform.
Prepare federal Form 2106 reflecting your employee business expense using California amounts (i.e., following California law). Include your entertainment expenses, if any, on line 5 of federal Form 2106 for California purposes.
Enter the amount from line 10 of federal Form 2106 on line 19.
Enter the fees you paid for preparation of your tax return, including fees paid for filing your return electronically. If you paid your tax by credit or debit card, include the convenience fee you were charged on line 21 instead of this line.
Enter the total amount you paid to produce or collect taxable income and manage or protect property held for earning income.
List the type of each expense next to line 21 and enter the total of these expenses on line 21. If you are filing a paper return and you cannot fit all your expenses in the box next to line 21, attach a statement showing the type and amount of each expense.
Examples of expenses to include on line 21 are:
Certain legal and accounting fees.
Custodial fees (for example, trust account).
Casualty and theft losses of property used in performing services as an employee from federal Form 4684, line 32 and line 38b, or federal Form 4797, Sales of Business Property, line 18a.
Deduction for repayment of amounts under a claim of right if $3,000 or less.
Claim of right – If you had to repay an amount that you included in your income in an earlier year, because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount repaid from your income for the year in which you repaid it. If the amount you repaid is less than $3,000, the deduction is subject to the 2% AGI limit for California purposes. If you are deducting the repayment for California, enter the allowable deduction on line 21.
If the amount repaid was not taxed by California, no deduction is allowed.
Adoption-related expenses – If you deducted adoption-related expenses on your federal Schedule A (Form 1040) and are claiming the adoption cost credit for the same amounts on your Form 540, enter the amount of the adoption cost credit claimed as a negative number on line 27.
Nontaxable income expenses – If, on federal Schedule A (Form 1040), you claim expenses related to producing income taxed under federal law but not taxed by California, enter the amount as a negative number on line 27.
You may claim expenses related to producing income taxed by California law but not taxed under federal law by entering the amount as a positive number on line 27.
State legislator’s travel expenses – Under California law, deductible travel expenses for state legislators include only those incurred while away from their place of residence overnight. Figure the difference between the amount allowed using federal law and the amount allowed using California law. Enter the difference as a negative number on line 27.
Interest on loans from utility companies – Taxpayers are allowed a tax deduction for interest paid or incurred on a public utility company financed loan that is used to purchase and install energy efficient equipment or products, including zone-heating products for a qualified residence located in California . Federal law has no equivalent deduction. Enter the amount as a positive number on line 27.
Is the amount on Form 540, line 13 more than the amount shown below for your filing status?
Single or married/RDP filing separately $244,857 Head of Household $367,291 Married/RDP filing jointly or qualifying surviving spouse/RDP $489,719
NO Transfer the amount from line 28 to line 29. Do not complete the Itemized Deductions Worksheet. YES Complete the Itemized Deductions Worksheet at the end of this line instructions.
Note :
If married or an RDP and filing a separate tax return, you and your spouse/RDP must either both itemize your deductions (even if the itemized deductions of one spouse/RDP are less than the standard deduction) or both take the standard deduction.
Also, if someone else can claim you as a dependent, claim the greater of the standard deduction or your itemized deductions. See the instructions for “California Standard Deduction Worksheet for Dependents” within 540 Booklet to figure your standard deduction.
Amount from Schedule CA (540), Part II, line 28.
Add the amounts on federal Schedule A (Form 1040), line 4, line 9, and line 15 plus any gambling losses included on line 16, if applicable.
Subtract line 2 from line 1. If the result is zero, STOP. Enter the amount from line 1 on Schedule CA (540), Part II, line 29.
Multiply line 3 by 80% (.80).
Amount from Form 540, line 13.
Enter the amount from line 29 instructions for your filing status.
Subtract line 6 from line 5. If the result is zero or less, STOP. Enter the amount from line 1 on Schedule CA (540), Part II, line 29.
Multiply line 7 by 6% (.06).
Compare line 4 and line 8. Enter the smaller amount here.
Total itemized deductions. Subtract line 9 from line 1. Enter the result here and on Schedule CA (540), Part II, line 29.
If your filing status is married/RDP filing separately and your spouse itemizes, enter the amount from line 29 (even if the standard deduction is larger).
Our privacy notice can be found in annual tax booklets or online. Go to ftb.ca.gov/privacy to learn about our privacy policy statement, or go to ftb.ca.gov/forms and search for 1131 to locate FTB 1131 EN-SP, Franchise Tax Board Privacy Notice on Collection – Aviso de Privacidad del Franchise Tax Board sobre la Recaudación. To request this notice by mail, call 800-338-0505 and enter form code 948 when instructed.
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015 , and to the California Revenue and Taxation Code (R&TC).
Net Operating Loss Suspension – For taxable years beginning on or after January 1, 2024, and before January 1, 2027, California has suspended the net operating loss (NOL) carryover deduction. Taxpayers may continue to compute and carryover an NOL during the suspension period. However , taxpayers with net business income or modified adjusted gross income (AGI) of less than $1,000,000 or with disaster loss carryovers are not affected by the NOL suspension rules. For more information, see California Revenue and Taxation Code (R&TC) Section 17276.24, and get form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations – Individuals, Estates, and Trusts.
Business Credit Limitation – For taxable years beginning on or after January 1, 2024, and before January 1, 2027, there is a $5,000,000 limitation on the application of business credits. The total of all business credits including the carryover of any credit for the taxable year may not reduce the “net tax” by more than $5,000,000. This limitation does not apply to the Low-Income Housing Credit or the Pass-Through Entity Elective Tax Credit. The credit for prior year alternative minimum tax (AMT) is not subject to the credit limitation. Business credits should be applied against “net tax” before other credits.
For each taxable year of the limitation, taxpayers may make an irrevocable election to receive an annual refundable credit amount, in future tax years, for business credits disallowed due to the $5,000,000 limitation. The election must be made annually by completing form FTB 3870, Election for Refundable Credit, and attaching it to an original, timely filed tax return.
If a taxpayer does not choose to make the election outlined above, business credits disallowed due to the limitation may be carried over. The carryover period for disallowed credits is extended by the number of taxable years the credit was not allowed.
For more information, refer to R&TC Sections 17039.4 and 17039.5, get form FTB 3870, and see the instructions for Part III, Credits That Reduce Tax .
Intangible Drilling and Development Costs – California law does not allow the Internal Revenue Code (IRC) Section 263(c) deduction for intangible drilling and development costs (IDCs) in the case of oil and gas wells paid or incurred on or after January 1, 2024. Since R&TC Section 17260(c) is specific to oil and gas wells, geothermal well IDCs are still afforded preferential treatment under R&TC Section 17201(c). Therefore, the tax preference item still applies for geothermal wells for California personal income tax purposes.
Percentage Depletion – For taxable years beginning on or after January 1, 2024, California law does not allow the calculation of depletion as a percentage of gross income from the property for specified natural resources, including coal, oil shale, oil and gas wells. R&TC Sections 17681.3 and 17681.6 allowing state nonconformity to federal rules for percentage depletion of certain refiner exclusions as well as the temporary suspension of taxable income limit for marginal production have also been repealed. For more information, see R&TC Section 17681.
Enhanced Oil Recovery Credit Repeal – For taxable years beginning on or after January 1, 2024, the Enhanced Oil Recovery Credit has been repealed. Taxpayers may now only claim available carryovers. For more information, get form FTB 3540, Credit Carryover and Recapture Summary.
In general, for taxable years beginning on or after January 1, 2015, California law conforms to the IRC as of January 1, 2015. However, there are continuing differences between California and federal law. When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level. For more information, go to ftb.ca.gov and search for conformity . Additional information can be found in FTB Pub. 1001, Supplemental Guidelines to California Adjustments, the instructions for California Schedule CA (540), California Adjustments – Residents, or Schedule CA (540NR), California Adjustments – Nonresidents or Part-Year Residents, and the Business Entity tax booklets.
The instructions provided with California tax forms are a summary of California tax law and are only intended to aid taxpayers in preparing their state income tax returns. We include information that is most useful to the greatest number of taxpayers in the limited space available. It is not possible to include all requirements of the R&TC in the instructions. Taxpayers should not consider the instructions as authoritative law.
Specific differences between California and federal law are noted in the instructions under the applicable line items.
Under California law, RDPs must file their California income tax returns using either the married/RDP filing jointly or married/RDP filing separately filing status. RDPs have the same legal benefits, protections, and responsibilities as married couples unless otherwise specified.
If you entered into a same sex legal union in another state, other than a marriage, and that union has been determined to be substantially equivalent to a California registered domestic partnership, you are required to file a California income tax return using either the married/RDP filing jointly or married/RDP filing separately filing status.
For purposes of California income tax, references to a spouse, husband, or wife also refer to a California RDP, unless otherwise specified. When we use the initials RDP, they refer to both a California registered domestic "partner" and a California registered domestic "partnership," as applicable. For more information on RDPs, get FTB Pub. 737, Tax Information for Registered Domestic Partners.
For taxable years beginning on or after January 1, 2022, the PTE elective tax credit ordering has changed. The PTE elective tax credit should be applied against the net tax after the other state tax credit. Refer to R&TC Section 17039 for more information.
For taxable years beginning on or after January 1, 2021, and before January 1, 2026, California law allows an entity taxed as a partnership or an "S" corporation to annually elect to pay an elective tax at a rate of 9.3% based on its qualified net income (QNI). The election shall be made on an original, timely filed return and is irrevocable for the taxable year.
The law allows a credit against the personal income tax to a taxpayer, other than a partnership, that is a partner, shareholder, or member of a qualified entity that elects to pay the elective tax, in an amount equal to 9.3% of the partner’s, shareholder's, or member's pro rata share or distributive share and guaranteed payments of QNI subject to the election made by the qualified entity. Generally, a disregarded business entity and its partners or members cannot receive the credit, except for a disregarded single member limited liability company (SMLLC) that is owned by an individual, fiduciary, estate, or trust subject to personal income tax. For more information, go to ftb.ca.gov and search for pte elective tax and get the following PTE elective tax forms and instructions:
Form FTB 3893, Pass-Through Entity Elective Tax Payment Voucher
Form FTB 3804, Pass-Through Entity Elective Tax Calculation
Form FTB 3804-CR, Pass-Through Entity Elective Tax Credit
This credit can reduce regular tax below the tentative minimum tax (TMT).
For taxable years beginning on or after January 1, 2019, NOL carrybacks are not allowed.
For taxable years beginning on or after January 1, 2019, California law generally conforms to the federal Tax Cuts and Jobs Act's definition of small businesses as taxpayers whose average annual gross receipts over three years do not exceed a certain amount. For the current taxable year, the threshold amount is $30 million. These small businesses are exempt from the requirement of using the Percentage of Completion Method of accounting for any construction contract if the contract is estimated to be completed within two years from the date the contract was entered into. A taxpayer may elect to apply the provision regarding accounting for long term contracts to contracts entered into on or after January 1, 2018.
California conforms to the provision of the federal Small Business and Work Opportunity Tax Act of 2007 which increased the age of children to 18 and under or a full-time student under age 24 for elections made by parents reporting their child’s interest and dividends.
AMT is required to be included in the computation of the estimated tax payments in order to meet a safe harbor from the underpayment of estimated tax penalty.
California tax law gives special treatment to some items of income and allows deductions and credits for some items of expense. Many individuals who benefit from these provisions must pay at least a minimum amount of tax and/or limit the amount of their credits.
Use Schedule P (540), Alternative Minimum Tax and Credit Limitations – Residents, to determine if:
You owe AMT.
Your credits must be reduced or eliminated entirely. Your credits may be limited even if you do not owe AMT, so be sure to complete Side 1 through Side 4 of Schedule P (540).
Complete Schedule P (540) to see if AMT applies to you. Attach it to Form 540 only if any one of the following apply:
You owe AMT.
You have more than two credits.
You have credits that are reported in Part III, Section A1, Section A2, or Section C. See the Credit Table for a list of credits.
The total of Part I, line 7 through line 13 is negative and you would be liable for AMT without taking those lines into account.
Schedule P (540), Part I, line 21, is more than Part II, line 22, and you have one or more adjustments on Part I, line 4 or line 7 through line 13l.
For AMT, certain items of income, deductions, etc., receive different tax treatment than for regular tax. Therefore, you need to refigure items for AMT that you figured for regular tax. In some cases, you may wish to do this by completing the applicable tax form a second time. If you do complete another form, do not attach it to your tax return, but keep it for your records.
For regular tax, some deductions may result in carryovers to future taxable years. Examples are investment interest expense, NOL, and capital loss. Because you may have to refigure these items for AMT, the carryover amount may be different for AMT than for regular tax. Although the carryovers that you figure for AMT do not affect the carryovers for regular tax, you must keep track of your AMT carryovers in order to complete your Schedule P (540) in future years.
If you are a partner in a partnership, a shareholder of an S corporation, a member of an LLC, or a beneficiary of an estate or trust, you must include your distributive share of adjustments and tax preference items shown on your Schedule K‑1 (565), for partners; Schedule K-1 (100S), for shareholders; Schedule K-1 (568), for members of an LLC; or Schedule K-1 (541), for beneficiaries.
If you paid AMT in a prior year, you may be able to claim the credit for prior year AMT. Get form FTB 3510, Credit for Prior Year Alternative Minimum Tax – Individuals or Fiduciaries, to see if you qualify.
The prior year AMT credit must be applied before any credits that can reduce regular tax below the TMT.
For more information, get federal Form 6251, Alternative Minimum Tax – Individuals.
A qualified taxpayer must exclude income, positive and negative adjustments, and preference items attributable to any trade or business when figuring AMTI. These adjustments and preference items must also be excluded when calculating any deductions that may result in AMT carryovers. You are a qualified taxpayer if you meet both of the following:
Own or have an ownership interest in a trade or business.
Have aggregate gross receipts (less returns and allowances) during the taxable year of less than $1,000,000 from all trades or businesses for which you are the owner or have an ownership interest. Gross receipts may include, but are not limited to, items reported on federal Schedules C, Profit or Loss from Business; D, Capital Gains and Losses; E, Supplemental Income and Loss (other than income from a trust); or F, Profit or Loss from Farming; and from federal Form 4797, Sales of Business Property (figured in accordance with California law); or California Schedule D‑1, Sales of Business Property (if required to complete it), that are associated with a trade or business. In the case of an ownership interest, you include only the proportional share of gross receipts of any trade or business from a partnership, S corporation, regulated investment company (RIC), a real estate investment trust (REIT), or real estate mortgage investment conduit (REMIC) in accordance with your ownership interest in the enterprise. Apply the $1,000,000 test to the return regardless of filing status. The threshold does not become $2,000,000 for married /RDP taxpayers filing jointly.
Aggregate gross receipts (less returns and allowances) means the sum of the gross receipts of the trades or businesses which you own and the proportionate interest of the gross receipts of the trades or businesses which you own and of pass-through entities in which you hold an interest.
Gross receipts (less returns and allowances) means the sum of the gross receipts from the production of business income, as defined in R&TC Section 25120(a), and the gross receipts from the production of nonbusiness income, as defined in R&TC Section 25120(d).
Proportionate interest means:
In the case of a pass-through entity which reports a profit for the taxable year, your profit interest in the entity at the end of your taxable year.
In the case of a pass-through entity which reports a loss for the taxable year, your loss interest in the entity at the end of your taxable year.
In the case of a pass-through entity which is sold or liquidates during the taxable year, your capital account interest in the entity at the time of the sale or liquidation.
Proportionate interest includes an interest in a pass-through entity including a partnership, S corporation, RIC, REIT, or REMIC.
If you are a qualified taxpayer both of the following applies:
In Part I, do not include any positive or negative adjustments or preference items attributable to any trade or business.
In Part I, line 17, enter all taxable income attributable to any trade or business.
RDPs compute their AMT using the same rules applicable to a married person. RDPs base their California AMT on the pro forma federal return. For more information on RDPs, get FTB Pub. 737.
Do not include any adjustment for differences between federal and California laws.
Enter on this line any of the following from Schedule CA (540), Part II, lines 5b and 5c, column A and line 6 (column A minus column B).
State and local personal property taxes
State, local, or foreign real property taxes
Enter home mortgage interest in which the proceeds were used for purposes other than buying, building, or improving your principal residence or a qualified dwelling that is your second home (see IRC Section 163(h)(3)). This may be all or part of the amount on Schedule CA (540), Part II, line 8a, line 8b, or line 8c (column A plus column C).
Example 1 : Gregory paid $950 interest on a $12,000 home equity loan used to buy a ski boat. He would enter $950 on line 4 because the proceeds were not used to buy, build, or improve his home.
Example 2 : Jackie paid $1,200 interest on a $15,000 home equity loan to install a swimming pool at her home. She would not make any entry on line 4 because the proceeds of the loan were used to improve her home.
Exception . Do not include interest on a mortgage you took out before July 1, 1982, if it was secured by property that was your main home or a qualified dwelling used by you or a member of your family at the time you took out the mortgage.
Enter on this line the amount from Schedule CA (540), Part II, line 25.
Enter on this line any refund of taxes you received if all of the following apply:
The taxes are those described in line 3
The taxes are attributable to a taxable year after 1986
You deducted the taxes in a taxable year after 1986
Enter on this line any investment interest expense adjustment. If you completed form FTB 3526, Investment Interest Expense Deduction, refigure your investment interest expense using a second form FTB 3526. Complete line 1 through line 8. Follow form FTB 3526 instructions for line 1 through line 8, except for the following:
When completing line 1, include any interest expense from Schedule P (540), Part I, line 4, that was paid or accrued on indebtedness attributable to property held for investment within the meaning of IRC Section 163(d)(5). An example is interest on a home equity loan from which the proceeds were invested in stocks or bonds. This interest might be deductible as home mortgage interest for regular tax, but not for AMT.
When entering your 2023 disallowed investment interest expense on line 2, use your 2023 AMT disallowed investment interest expense.
When completing lines 4a through 4c, refigure your gross investment income, any net gain from the disposition of property held for investment, and any investment expenses by taking into account all of your AMT adjustments and preferences that apply.
Your adjustment is the difference between your AMT form FTB 3526, line 8, and your regular tax form FTB 3526, line 8. If the amount figured for AMT is more than the amount figured for regular tax, enter the adjustment as a negative amount.
If you did not itemize deductions and had investment interest expense, do not enter an adjustment. However, if you reported investment interest expense on federal Schedule E, follow the instructions above for completing form FTB 3526.
If you filed federal Schedules C, E, or F and have tangible property which you began depreciating after 1986, you must use the Alternative Depreciation System (ADS) to calculate AMT depreciation as follows:
For property placed in service before 1999, refigure the AMT depreciation using the ADS, with the same convention used for the regular tax. See the table within this line instruction for the method and recovery period to use.
IF the property is THEN use the IRC Section 1250(c) property Straight-line method over 40 years. Tangible property (other than IRC Section 1250(c) property) depreciated using straight-line for regular tax Straight-line method over the property's AMT class life. Any other tangible property 150% declining balance method, switching to straight-line the first tax year gives a larger deduction over the property's AMT class life.
Get federal Pub. 946, How to Depreciate Property, for more information on AMT class life.
For property placed in service after 1998, no adjustment is necessary if the property is IRC Section 1250(c) property or tangible property (other than IRC Section 1250(c) property) depreciated using the straight-line method or 150% declining balance method for regular tax. For any other tangible property, use the 150% declining balance method, switching to the straight-line method the first tax year that it provides a larger deduction. Use the same convention and recovery period used for regular tax.
Get federal Pub. 946 or refer to IRC Section 168(g) for more information on the ADS method.
Grapevines replanted as a result of phylloxera infestation or Pierce's Disease that are depreciated over 5 years for regular tax must be depreciated over 10 years for AMT.
Partners, S corporation shareholders, and LLC members : Enter the amount shown on the Schedule K-1 (565, 100S, or 568) issued by your partnership, S corporation, or LLC.
Enter on line 8 the difference between depreciation for regular tax and depreciation for AMT. Do not include depreciation from the following:
Expenses you incurred as an employee and deducted on federal Schedule A (Form 1040), Itemized Deductions.
An activity for which you are not at risk.
Amounts received from a partnership or S corporation, if the basis limitations under IRC Section 704(c) or IRC Section 1366(d) apply.
A passive activity.
A tax shelter farm activity.
Instead, include these types of depreciation when you figure adjustments for line 5, line 11, line 13f, line 13j, or line 13k, whichever applies.
If the AMT depreciation is more than the regular tax depreciation, enter the difference on line 8 as a negative amount.
You will have an entry on this line only if you reported a gain or loss on California Schedule D (540), California Capital Gain or Loss Adjustment, or Schedule D-1, federal Schedule D, federal Form 4797, or federal Form 4684, Casualties and Theft, for income producing property that has a different basis for AMT than for regular tax. Generally, if you reported a gain or loss from the sale or exchange of mutual funds, stocks, or bonds, you will not have an entry on this line.
To figure the amount to enter on this line:
Step 1 – Refigure the adjusted basis of the asset sold. Take into account any AMT adjustments you made this year or in previous years for depreciation, incentive stock options, circulation expenditures, pollution control facilities, research and experimental expenditures, and mining costs.
Step 2 – Refigure your gain or loss using the adjusted basis from Step 1.
Step 3 – Figure the difference between the AMT gain or loss and the regular tax gain or loss and enter the result on line 9. Enter the difference as a negative amount if: the AMT gain is less than the regular tax gain; the AMT loss is more than the regular tax loss; or you have an AMT loss and a regular tax gain.
Line 10 – Incentive stock options and California qualified stock options Incentive stock options (ISOs). For regular tax, no income is recognized when an ISO, as defined in IRC Section 422(b), is granted or exercised. However, this rule does not apply for AMT. Instead, you must generally include on line 10 the excess of:
The fair market value (FMV) of the stock acquired through the exercise of the option (determined without regard to any lapse restriction) when your rights in the stock first become transferable, or when these rights are no longer subject to a substantial risk of forfeiture, over
The amount you paid for the stock.
Increase your AMT basis of any stock acquired through the exercise of an ISO by the amount of the AMT adjustment. If you acquired stock by exercising an ISO and you disposed of that stock in the same year, the tax treatment under regular tax and AMT is the same (no adjustment is required).
California qualified stock options (CQSOs) . Under R&TC Section 17502, Section 17502, taxpayers whose earned income from the corporation granting the CQSO was $40,000 or less may exclude compensation arising from the exercise of a CQSO from regular tax income. The amount of compensation excluded for regular tax must be included for AMT on this line.
You may want to complete a second form FTB 3801, Passive Activity Loss Limitations, and the other forms or schedules on which your passive activities are reported to figure this adjustment. You may enter the following types of adjustments on this line:
Regular passive activities . Refigure your passive activity gains and losses for AMT by taking into account all AMT adjustments and preferences and AMT prior year unallowed losses that apply to the passive activity. The adjustment is the difference between your AMT passive activity income or loss (from activities reported on federal Schedules C, E, F, or federal Form 4835, Farm Rental Income and Expenses) and income or loss from these activities for regular tax.
Publicly traded partnership (PTP) . If you had losses from a PTP, you will have to refigure the losses using any AMT adjustments, preferences, and any AMT prior year unallowed losses.
Tax shelter passive farm activities . Refigure any gain or loss from a tax shelter passive farm activity. Take into account all AMT adjustments, preferences, and AMT prior year unallowed losses. If the amount is a gain, include it on your AMT form FTB 3801. Do not include a tax shelter passive farm activity loss on your AMT form FTB 3801. Instead, carry the loss forward to offset against future tax shelter passive farm activities.
Insolvency . If, at the end of the taxable year, your liabilities exceed the FMV of your assets, increase your passive activity loss allowed by that excess but not by more than your total loss. See IRC Section 58(c)(1).
Enter the amount of any other adjustments or preferences that apply to you on line 13a through line 13l. Enter the total on line 13.
If you elected the optional 3-year write-off period for circulation expenditures under IRC Section 59(e), skip this line.
For regular tax, IRC Section 173 allows you to deduct the full amount of circulation expenditures in the taxable year you paid or incurred them. For AMT, you must amortize these expenditures over three years beginning with the year you paid or incurred the expenditures. Enter the difference between your AMT deduction and your regular tax deduction. If your AMT deduction is more than your regular tax deduction, enter your adjustment as a negative amount.
See IRC Section 56(b)(2) for a special rule that applies to losses related to circulation expenditures.
For AMT, if the depletion deduction for mines, wells, and other natural deposits determined under IRC Section 611 exceeds the adjusted basis of the property at the end of your taxable year, you have a depletion preference adjustment.
To figure your adjusted basis, use the rules in IRC Section 1016, but do not reduce the adjusted basis by current-year depletion. Figure the excess amount separately for each property. Enter on this line only the depletion amount that exceeds your adjusted basis.
If, for regular tax purposes, you used the installment method to report a non-dealer disposition of property that occurred after August 16, 1986, but before January 1, 1990, and if the obligation that arose from the disposition was an installment obligation to which the proportionate disallowance rule applied, refigure your income for AMT purposes without regard to the installment method.
Enter the difference between your AMT and regular tax income on this line. If the AMT income is smaller, enter the difference as a negative amount.
Qualified small business stock (QSBS) exclusion (R&TC Section 18152.5). For taxable years beginning on or after January 1, 2008, and before January 1, 2013, taxpayers were allowed to exclude 50% of the gain from the sale or exchange of their QSBS held for more than five years. If you received installment sale payments in the current year for sales of QSBS made before January 1, 2013, and you excluded the gain as allowed under R&TC Section 18152.5, multiply the excluded amount by 50% and enter it on this line as a positive amount.
If you elected the optional 60-month write-off under IRC Section 59(e) for regular tax for all property in this category, skip this line.
IDCs from geothermal wells are preferences to the extent that the excess IDCs exceed 65% of the net income from the wells. To figure excess IDCs:
Figure the amount of your IDCs allowed for regular tax under IRC Section 263(c). Do not include any deduction for nonproductive wells. Then refigure your IDCs allowed for AMT by amortizing them over 120 months, starting with the month you placed the well in production. Then subtract your AMT IDCs from your regular tax IDCs to get your excess IDCs. You may elect to use any other method that is allowed in determining cost depletion.
Figure net income by reducing the gross income from all geothermal wells that you received or accrued during the taxable year by any deductions allocable to these properties (reduced by the excess IDCs). Use only income and deductions allowed for AMT.
Multiply the net income by 65% (.65). Subtract the result from the excess IDCs figured in A. This is your excess IDCs that you enter on this line.
For regular tax, you may have figured taxable income from a long-term contract (entered into after February 28, 1986) using the completed-contract method or another method.
For AMT, use the percentage-of-completion method described in IRC Section 460(b) to determine your taxable income from any long‑term contract, defined in IRC Section 460(f), you entered into after February 28, 1986. However, this rule does not apply to: 1) any home construction contract, as defined in IRC Section 460(e)(5), you entered into after June 20, 1988, and before 1991, if you meet the 2-year estimated completion requirement of IRC Section 460(e)(1)(B)(i) and the $10-million ceiling on average annual gross receipts requirement of IRC Section 460(e)(1)(B)(ii), or 2) any home construction contract entered into after 1990.
In the case of a contract described in IRC Section 460(e)(1), use the simplified procedures for allocating costs outlined in IRC Section 460(b)(3) to determine the percentage of completion.
Enter on line 13e the difference between the income you reported for regular tax and the income you recomputed for AMT. If the income for AMT is less than the income for regular tax, enter the difference as a negative amount.
If you include AMT adjustments or preferences on this line, do not include them on any other line of this schedule. Do not include any passive activities on this line. Instead, use line 11. Also, use line 11 for passive tax shelter farm activities. Use line 13k for nonpassive tax shelter farm activities.
For AMT, refigure certain limited losses using your AMT adjustments and preferences. Refigure your gains and losses from activities for which you are not at risk. Also, refigure your basis limitations that apply to partnerships and S corporations. Refer to IRC Sections 59(h), 465, 704(d), and 1366(d).
Enter on this line the difference between AMT limited losses (from activities reported on federal Schedules C, E, F, or federal Form 4835) and your regular tax limited losses from these activities.
If you elected the optional 10-year write-off under IRC Section 59(e) for regular tax, skip this line. For AMT, you must capitalize your mining exploration and development costs and amortize them over 10 years beginning with the taxable year you paid or incurred the expenditures. Enter the difference between your AMT mining amortization and your regular tax mining deduction. If your AMT mining amortization is more than your regular tax mining deduction, enter your adjustment as a negative amount.
See IRC Section 56(a)(2)(B) for special rules that apply to losses related to mining property.
Distributions you received from a cooperative may be includible in income. Unless the distributions are nontaxable, enter on line 13h the total AMT patronage dividend and per-unit retain allocation adjustment reported to you by the cooperative.
For regular tax, you may elect to amortize the basis of a certified pollution control facility over 60 months. For facilities placed in service before 1999, the AMT deduction is figured using the alternative depreciation system (ADS) described in IRC Section 168(g). Use the federal Class Life Asset Depreciation Range System (ADR) under the straight-line method. For facilities placed in service after 1998, the AMT deduction is figured under the modified accelerated cost recovery system (MACRS) using the straight-line method. Enter the difference between your AMT pollution control facilities depreciation and your regular tax pollution control facilities amortization. If your AMT pollution control facilities depreciation is more than your regular tax pollution control facilities amortization, enter the adjustment as a negative amount.
Do not make this adjustment for costs paid or incurred in connection with an activity in which you materially participated under the passive activity rules or for costs for which you elected the optional 10-year write-off under IRC Section 59(e) for the regular tax. If you elected the optional 10-year write-off period for research and experimental expenditures under IRC Section 59(e) for regular tax, skip this line.
For regular tax, IRC Section 174(a) allows you to deduct your research and experimental expenditures in the taxable year you paid or incurred them. If you deducted them in the year incurred, amortize these expenditures over 10 years for AMT. Enter the difference between your AMT deduction and your regular tax deduction. If your AMT deduction is more than your regular tax deduction, enter your adjustment as a negative amount.
See IRC Section 56(b)(2)(B) for special rules that apply to losses related to circulation, research, or experimental expenditures.
If you include AMT adjustments or preferences on this line, do not include them on any other line of this schedule.
Complete this line only if you have a gain or loss from a tax shelter farm activity, as defined in IRC Section 58(a)(2), that is not a passive activity. If the tax shelter farm activity is a passive activity, include it with your other passive activities on line 11.
Refigure all gains and losses you reported for regular tax from tax shelter farm activities using your AMT adjustments and preferences. Figure your tax shelter farm activity gain or loss for AMT using the same rules you used for regular tax except for the following:
Do not take any refigured loss unless you are insolvent. See IRC Section 58(c)(1).
Do not offset gains from other tax shelter farm activities with your refigured loss.
Suspend and carryover your loss to future taxable years until one of the following apply:
Have a gain in a future taxable year from that same activity.
Dispose of the activity.
Enter on this line the difference between the amount that was reported for regular tax for the activity on federal Schedule E or federal Form 4835 and the amount that would be reported for the activity for AMT.
If you have an entry on one of the following lines:
Line 7 (if you deducted investment interest on federal Schedule E)
Line 8 through line 11
Line 13a through line 13k
Refigure the following items. These items are limited based on income (other than a limit based on federal AGI or federal modified AGI) using your AMT income:
IRC Section 179 expense.
Taxable IRA distribution (if prior year IRA deductions were different for AMT and regular tax).
Expenses for business or rental use of your home.
Conservation expenses.
Self-employed health insurance deduction.
Keogh retirement plan or self-employed SEP or SIMPLE deduction.
IRA deductions affected by the earned income limitation of IRC Section 219(b)(1)(B).
Figure the difference between AMT and regular tax amount for each item. Combine the amounts for all your related adjustments and enter the total on line 13l. Keep a copy of all computations for your records, including any AMT carryover and basis amounts.
Enter on this line the amount from Form 540, line 19. If Form 540, line 19 is zero, subtract Form 540, line 18 from Form 540, line 17 and enter the result as a negative amount.
Qualified taxpayers must exclude income from any trade or business when figuring AMTI. If you are a qualified taxpayer, see General Information G, Alternative Minimum Taxable Income (AMTI) Exclusion, and enter your taxable trade or business income on line 17. If zero or less, enter -0-.
If you itemized deductions for California purposes and your federal AGI is more than the amount shown on line 18, your California itemized deductions were limited for regular tax. For AMT, this limitation does not apply. Enter the amount from line 9 of the Itemized Deductions Worksheet in the instructions for Schedule CA (540), Part II, line 29.
For taxable years beginning on or after January 1, 2024, and before January 1, 2027, California has suspended the NOL carryover deduction. Taxpayers may continue to compute and carryover an NOL during the suspension period. However , taxpayers with net business income or modified AGI of less than $1,000,000 or with disaster loss carryovers are not affected by the NOL suspension rules. For more information, get form FTB 3805V.
If you are carrying over an NOL from a prior year, refigure your NOL deduction for AMT purposes as follows:
For the year the loss was incurred, complete another form FTB 3805V; FTB 3805Z, Enterprise Zone Deduction and Credit Summary; FTB 3807, Local Agency Military Based Recovery Area Deduction and Credit Summary; or FTB 3809, Targeted Tax Area Deduction and Credit Summary, using your AMT income and expense amounts rather than the regular tax amounts.
If you incurred the NOL in 2023, the amount of the carryover is the amount figured in Step 1. Otherwise, the amount of the carryover is the amount from Step 1 minus the amounts used for AMT purposes in all preceding carryover years.
Enter on line 20 the lesser of the NOL carryover from Step 2 or 90% of the amount on line 19.
Married/RDP taxpayers filing separate returns complete the following worksheet if line 21 is more than $465,231.
Enter the amount from Schedule P (540), Part I, line 21.
Maximum exemption amount $465,231.
Subtract line 2 from line 1.
Multiply line 3 by 25% (.25).
Enter the smaller of line 4 or $60,029.
Add line 1 and line 5. Enter the result here and replace the amount on Schedule P (540), Part I, line 21, with this amount.
If line 21 is more than the amount shown for your filing status in the middle column of the chart on line 22, Side 2 of Schedule P (540), complete the Exemption Worksheet within this line instruction to figure the amount to enter on line 22.
Your exemption amount is limited to the amount of your earned income plus $9,450 if condition 1, 2, or 3 below applies to you.
You were under age 18 at the end of 2024.
You were age 18 at the end of 2024 and did not have earned income that was more than half of your support.
You were a full-time student over age 18 and under age 24 at the end of 2024 and did not have earned income that was more than half of your support.
If condition 1, 2, or 3 applies to you, complete the Exemption Worksheet, including lines 7 through 10, to figure the amount to enter on line 22.
Do not complete this worksheet if the child filed a joint tax return for 2024 or if both parents were deceased at the end of 2024.
Certain January 1 Birthdays . If you were born on January 1, 2007, you are considered to be age 18 at the end of 2024. Your exemption amount is limited only if you did not have earned income that was more than half of your support.
If you were born on January 1, 2006, you are considered to be age 19 at the end of 2024. Your exemption amount is limited only if you were a full-time student who did not have earned income that was more than half of your support.
If you were born on January 1, 2001, you are considered to be age 24 at the end of 2024. Your exemption amount is not limited.
If line 21 (AMTI) is equal to or more than $697,870 if single or head of household; $930,498 if married/RDP filing jointly or qualifying surviving spouse/RDP; $465,231 if married/RDP filing separately, your exemption amount is zero. Do not complete this worksheet; instead, enter -0- on line 22.
Enter $90,048 if single or head of household; $120,065 if married/RDP filing jointly or qualifying surviving spouse/RDP; $60,029 if married/RDP filing separately
Enter your AMTI from Schedule P (540), Part I, line 21
Enter $337,678 if single or head of household; $450,238 if married/RDP filing jointly or qualifying surviving spouse/RDP; $225,115 if married/RDP filing separately
Subtract line 3 from line 2. If zero or less, enter -0-
Multiply line 4 by 25% (.25)
Subtract line 5 from line 1. If zero or less, enter -0-. If any of the three conditions under "Certain Children Under Age 24" apply to you, go to line 7. Otherwise, enter this amount on Schedule P (540), Part II, line 22 and complete Schedule P (540)
Minimum exemption amount for certain children under age 24 $9,450.
Enter your earned income*, if any.
Add line 7 and line 8.
Enter the smaller of line 6 or line 9 here and on Schedule P (540), Part II, line 22
*Earned income includes wages, tips, and other payments received for personal services performed.
If line 23 is zero or less, enter -0- on line 23 and line 24. Go to line 25.
Business Credit Limitation – For taxable years beginning on or after January 1, 2024, and before January 1, 2027, there is a $5,000,000 limitation on the application of business credits. The total of all business credits including the carryover of any credit for the taxable year may not reduce the “net tax” by more than $5,000,000.
The credit for prior year AMT is not subject to the credit limitation.
The limitation only applies to business credits and does not apply to the following credits:
Earned income tax credit
Young child tax credit
Foster youth tax credit
Credit for household and dependent care
Credit for elective tax under the Small Business Relief Act
Credit for adoption costs
Renter’s tax credit
Personal exemption credit
Credit for qualified joint custody head of household and a qualified taxpayer with a dependent parent
Credit for qualified senior head of household
Credit for low-income housing
Excess contributions of unemployment compensation
The credits listed above are required to be applied after any business credits are applied.
For each taxable year of the limitation, taxpayers may make an irrevocable election to receive an annual refundable credit amount, in future tax years, for business credits disallowed due to the $5,000,000 limitation. The election must be made annually by completing form FTB 3870 and attaching it to an original, timely filed tax return.
If a taxpayer does not choose to make the election outlined above, business credits disallowed due to the limitation may be carried over. The carryover period for disallowed credits is extended by the number of taxable years the credit was not allowed.
Taxpayers are required to keep track of the disallowed business credits on a worksheet and provide it to the Franchise Tax Board upon request.
Amount of credit that may be used to offset tax.
Tax that may be offset.
Amount of credit, if any, that may be carried over to future years.
Order in which to claim credits, if you have more than one credit to claim.
Complete Form 540 through line 35.
Figure the amount of your credits using the credit form or worksheet identified on the Credit Table . Attach the credit form to your Form 540, if applicable.
Complete line 1 through line 3 to figure the amount of excess tax you may offset by credits.
Identify which sections of Part III you may use to take your tax credits. Credits without carryover provisions are listed on Schedule P (540) in Section A1, Section B1, and Section B3 and may be taken only in these sections. See the Credit Table for a list of credits. This table identifies the sections of Part III in which you may take these credits.
If you have credits in Section B, complete line 11 in addition to the lines for your credits.
Enter the credit code and the credit name in the space provided. See the Credit Table for the credit code. Do not enter the same credit code or name on more than one line within a section.
Complete column (a) through column (d) for each line on which you are taking a credit. See " Column (a) through Column (d) Instructions ."
If your credits are taken in more than one section, complete each section before going to the next section.
Once you complete Part III, see " How to Claim Your Credits ."
Line 3 – Subtract line 2 from line 1. If the amount is zero or less than zero, go to question 1. If the amount is more than zero, go to Section A1 Instructions.
Does the Credit Table show that you may take your credit only in Section A1 or Section A2? Yes You may not take the credit this year. Go to question 2. No Go to Section B to figure the amount of credit you may take this year. Then go to Section C if the Credit Table shows that you may also take your credit in Section C.
Does the credit have carryover provisions? Yes Enter the credit code, credit name, and credit amount in column (a) of the section indicated by the table. Enter -0- in column (b). Enter the credit amount in column (d). This is the amount of the credit you may carry over and use in future years. No You may not take the credit this year or in future years.
The prior year AMT credit must be applied before any credits that can reduce regular tax below the TMT.
Line 4 and Line 5 – If you have any of the credits listed in this section, complete column (a) through column (c) for each credit in the order listed.
For taxable years beginning on or after January 1, 2024, and before January 1, 2027, if you did not claim all or a portion of the Prison Inmate Labor credit due to the $5,000,000 business credit limitation, only the disallowed portion of the credit may be carried over by the number of taxable years the credit is not allowed.
Line 6 through Line 10 – Follow the Credit Table Instructions to find out in which section to claim your credit. Then complete column (a) through column (d) for each credit in each section before going to the next section.
Line 12 through Line 15 – If you have any of the credits listed in this section, complete column (a) through column (c) for each credit in the order listed.
Line 16 through Line 19 – Follow the Credit Table Instructions to find out in which section to claim your credit. Then complete column (a) through column (d) for each credit in each section before going to the next section.
Generally, it is to your advantage to apply credits with limited carryovers before credits with no limitation on carryover. However, you may apply credits with no limitation on carryover first, if that is to your advantage.
Line 20 – If you have Other State Tax Credit, complete column (a) through column (c). Get California Schedule S, Other State Tax Credit, for more information.
Line 21 – If you have pass-through entity elective tax credit, complete column (a) through column (d). Get form FTB 3804-CR, for more information.
Line 23 and Line 24 – If you have any of the credits listed in this section, complete column (a) through column (d) for each credit in the order listed.
In column:
(a) Enter the amount of credit available to offset tax.
(b) Figure the amount of credit you are able to use this year by entering the smaller of the amount in column (a) or the amount in column (c) from the previous line.
(c) Figure the amount of tax remaining to be offset by other credits by subtracting the amount in column (b) from the balance in column (c) of the previous line.
(d) Enter the amount of credit carryover available to use in future years by subtracting the amount in column (b) and any business credit amount elected to be refundable, in future years, on form FTB 3870, if applicable, from the amount in column (a).
Claim your credits by transferring them to Form 540 as follows:
Line 5 Nonrefundable Child and Dependent Care Expenses Credit – Enter the total amount of the credit from column (b), Section A1 on Form 540, line 40.
Line 15 Nonrefundable Renter’s Credit – Enter the total amount of nonrefundable renter's credit from column (b), Section B1 on Form 540, line 46.
Other Credits on Line 4, Line 6 through Line 14, and Line 16 through Line 21 :
If you claim one or two other credits, enter the name, code, and amount of the credit from column (b) on Form 540, line 43 and/or line 44.
If you have more than two other credits, do not use line 43 or 44 on Form 540. Add the amounts from column (b) for the other credits and enter the total on Form 540, line 45.
Our privacy notice can be found in annual tax booklets or online. Go to ftb.ca.gov/privacy to learn about our privacy policy statement, or go to ftb.ca.gov/forms and search for 1131 to locate FTB 1131 EN-SP, Franchise Tax Board Privacy Notice on Collection – Aviso de Privacidad del Franchise Tax Board sobre la Recaudación. To request this notice by mail, call 800-338-0505 and enter form code 948 when instructed.
Find your credits in the Credit Table.
See which sections are identified under "Offset Tax in Section."
Take the credit only in the sections the Credit Table identifies for your credit.
Use the credit in the earliest section possible.
Complete each section before going to the next section.
Code Current Credits Form Offset Tax in Section 233 California Competes Tax FTB 3531 B2 223 California Motion Picture and Television Production FTB 3541 A2 247 Cannabis Equity Tax FTB 3821 A2 197 Child Adoption* Worksheet B2 232 Child and Dependent Care Expenses FTB 3506 A1 235 College Access Tax FTB 3592 B2 173 Dependent Parent* Worksheet B1 205 Disabled Access for Eligible Small Businesses FTB 3548 A2 204 Donated Agricultural Products Transportation FTB 3547 A2 246 High-Road Cannabis Tax FTB 3820 A2 244 Homeless Hiring Tax FTB 3831 A2 170 Joint Custody Head of Household* Worksheet B1 172 Low-Income Housing FTB 3521 B2 213 Natural Heritage Preservation FTB 3503 B2 237 New California Motion Picture and Television Production FTB 3541 A2 238 New Donated Fresh Fruits or Vegetables FTB 3814 A2 234 New Employment FTB 3554 A2 None Nonrefundable Renter’s* Worksheet B1 187 Other State Tax Sch. S B3 242 Pass-Through Entity Elective Tax FTB 3804-CR B4 188 Prior Year Alternative Minimum Tax FTB 3510 A2 162 Prison Inmate Labor FTB 3507 A1 239 Program 3.0 California Motion Picture and Television Production FTB 3541 B2 183 Research FTB 3523 B2 163 Senior Head of Household* Worksheet B1 245 Soundstage Filming Tax FTB 3541 B2 243 State Historic Rehabilitation Tax FTB 3835 B2
*See the instructions for Form 540.
Code Repealed Credits with Carryover Provisions Form Offset Tax in Section 175 Agricultural Products FTB 3540 A2 196 Commercial Solar Electric System FTB 3540 B2 181 Commercial Solar Energy FTB 3540 B2 C 224 Donated Fresh Fruits or Vegetables FTB 3540 A2 194 Employee Ridesharing FTB 3540 A2 190 Employer Child Care Contribution FTB 3540 A2 189 Employer Child Care Program FTB 3540 A2 191 Employer Ridesharing (Large) FTB 3540 A2 192 Employer Ridesharing (Small) FTB 3540 A2 193 Employer Ridesharing (Transit Passes) FTB 3540 A2 182 Energy Conservation FTB 3540 A2 203 Enhanced Oil Recovery FTB 3540 A2 176 Enterprise Zone Hiring FTB 3805Z B2 176 Enterprise Zone Sales or Use Tax FTB 3805Z B2 218 Environmental Tax FTB 3540 A2 207 Farmworker Housing FTB 3540 A2 198 Local Agency Military Base Recovery Area Hiring FTB 3807 A2 198 Local Agency Military Base Recovery Area Sales or Use Tax FTB 3807 A2 160 Low-Emission Vehicles FTB 3540 A2 240 Main Street Small Business Tax FTB 3540 A2 241 Main Street Small Business Tax II FTB 3540 A2 211 Manufacturing Enhancement Area Hiring FTB 3808 A2 185 Orphan Drug FTB 3540 B2 184 Political Contributions FTB 3540 A2 174 Recycling Equipment FTB 3540 A2 186 Residential Rental & Farm Sales FTB 3540 A2 171 Ridesharing FTB 3540 A2 200 Salmon & Steelhead Trout Habitat Restoration FTB 3540 A2 180 Solar Energy FTB 3540 B2 C 179 Solar Pump FTB 3540 A2 210 Targeted Tax Area Hiring FTB 3809 B2 210 Targeted Tax Area Sales or Use Tax FTB 3809 B2 178 Water Conservation FTB 3540 A2 161 Young Infant FTB 3540 A2