Looking for a California Tax Forms And Templates? Download it for free!

Mandatory Electronic Payments – Individuals,

Attach separate schedules for regular taxable

Line 3 – See the instructions for Part II, line 1,

corporations, and exempt organizations are

income and AMTI that include the following:

and complete line 3 in the same manner, using

required to remit all payments electronically

only income and deductions allowed for AMT

y Identification of each completed long-term

once the taxpayer makes an estimate or

purposes.

contract by contract number, job name, or

extension payment exceeding $20,000, or

any other reasonable method used in your

Line 4 – Multiply the amount on line 3 by the

files an original tax return with a total tax

records to identify each contract.

applicable AMT rate as follows:

liability of over $80,000. Once this threshold

y The amount of income previously reported

Entity and Period

AMT rate

is met, all subsequent payments regardless

for each contract based on estimated

of amount, tax type, or taxable year must be

(a) Individuals and pass-through entities in

contract price and costs for each prior year.

remitted electronically. The first payment that

which, at all times during the year, more than

y The amount of income for each contract

would trigger the mandatory electronic fund

50% of the interests in the entity are held by

allocable to each prior year based on actual

individuals directly or through other pass-

transfer (EFT) requirement does not have to

contract price and costs.

through entities:

be made electronically. Electronic payments

y The net adjustment to income from long-

Taxable years beginning after 1986

can be made using Web Pay on FTB’s website,

term contracts for each prior year.

and before 1991 . . . . . . . . . . . . . . . . . . . 7%

electronic funds withdrawal (EFW) as part of

y Any other adjustments that result in

Taxable years beginning after 1990

the e-file return, or by credit card.

a change to income due to long-term

and before 1997 . . . . . . . . . . . . . . . . . . 8.5%

Individuals that do not send the payment

contracts.

Taxable years beginning after 1996

and before 2009 . . . . . . . . . . . . . . . . . . . . 7%

electronically will be subject to a 1%

An owner of an interest in a pass-through

Taxable years beginning after 2008

noncompliance penalty, unless a waiver

entity is not required to provide the detail listed

and before 2011 . . . . . . . . . . . . . . . . . 7.25%

exception applies. For more information or to

in the first three items above with respect to

Taxable years beginning after 2010. . . . . . . . . 7%

obtain the waiver form, go to ftb.ca.gov and

prior years. The entity should provide line 1

(b) Corporations and pass-through entities not

search for mandatory epay.

amounts on Schedule K-1 (100S, 541, 565, or

included in (a) above:

Corporations that do not remit the payment

568) or on a separate statement for its taxable

Taxable years ending after 1986

and beginning before 1997 . . . . . . . . . . . 7%

electronically will be subject to a 10%

year in which the contracts are completed or

Taxable years ending after 1996 . . . . . . . . 6.65%

noncompliance penalty. Corporations can

adjusted.

make payments online using Web Pay for

If you are reporting line 1 amounts from more

Line 5 – If both line 2 and line 4 are negative,

Businesses. Corporations can make an

than one Schedule K-1 (100S, 541, 565, or

enter whichever amount is larger. Treat

immediate payment or schedule payments up

568) or similar statement, you must attach a

both numbers as positive when making

to a year in advance. Go to ftb.ca.gov for more

schedule detailing by entity, the net change to

this comparison, but enter the amount as a

information.

income from long-term contracts.

negative number. If the amount on one line is

Fiduciaries, estates, and trusts are not required

negative, but the amount on the other line is

See Specific Line Instructions, Part I, Line 2,

to make payments electronically, regardless of

positive, enter the positive amount on line 5.

Net Adjustment.

the amount owed.

Line 2 – Multiply the amount on line 1 by the

Part II — Simplified Marginal

applicable regular tax rate for each prior year

shown in column (a), (b), or (c). The applicable

Impact Method

regular tax rate is as follows:

Part II is used only by pass-through entities

Entity and Period

Regular rate

required to apply the look-back method at the

entity level and taxpayers electing (or with an

(a) Individuals and pass-through entities in

which, at all times during the year, more than

election in effect) to use the simplified marginal

50% of the interests in the entity are held by

impact method. See General Information H,

individuals directly or through other pass-

Simplified Marginal Impact Method.

through entities:

To elect the simplified marginal impact method,

Taxable years beginning before 1987 . . . . . 11%

attach a statement to form FTB 3834 for the

Taxable years beginning after 1986

first taxable year of the election. The statement

and before 1991 . . . . . . . . . . . . . . . . . . 9.3%

Taxable years beginning after 1990

must indicate that you are making an election

and before 1996 . . . . . . . . . . . . . . . . . . 11%

under Treas. Reg. Section 1.460-6(d) to use

Taxable years beginning after 1995

the simplified marginal impact method. Once

and before 2010 . . . . . . . . . . . . . . . . . . 9.3%

made, the election applies to all applications

Taxable years beginning after 2009

of the look-back method in the year of the

and before 2012 . . . . . . . . . . . . . . . . . . . . 9.55%

election and all later years, unless the FTB

Taxable years beginning after 2011

consents to a revocation of the election.

and before 2013 . . . . . . . . . . . . . . . . . . 9.3%

Taxable years beginning after 2012. . . . . . 12.3%

Columns (a), (b), and (c) – Enter at the top

(b) S corporations:

of each column the ending month and year

Taxable years beginning after

for each prior taxable year in which you were

1986 and before 1994. . . . . . . . . . . . . . 2.5%

required to report income from the completed

Taxable years beginning after 1993. . . . . . . 1.5%

long-term contract.

included in (a) or (b) above:

Line 1 – In each column, show a net increase

Taxable years ending before 1987. . . . . . . . 9.6%

to income as a positive amount and a net

Taxable years ending after 1986

decrease to income as a negative amount. For

and beginning before 1997 . . . . . . . . . . 9.3%

apportioning taxpayers, the net increase or net

Taxable years beginning after 1996. . . . . . 8.84%

decrease to income is after apportionment.

For more information, see Cal. Code Regs.,

Corporations cannot reduce their tax below the

tit. 18 section 25137-2.

minimum franchise tax.

Page 4 FTB 3834 Instructions 2016

Instructions For Form Ftb 3834 - Interest Computation Under The Look-Back Method For Completed Long-Term Contracts - 2016 Page 4

Related Articles

Related forms

Related Categories