Fillable Form Ftb 3531 - California Competes Tax Credit

Part I Credit Allocation and Credit Earned

requirements, referred to as “milestones.” If a taxpayer meets the

milestones for a taxable year as specified in the credit agreement, then

Line 1, column (b) – Enter the amount of credit allocated for each year

the credit for that year is earned and may be claimed on the tax return.

from your credit agreement. (See your credit agreement, “Exhibit A

D Limitations

Milestones” for the tax credit allocation amounts.)

Line 1, column (c) – For the current taxable year, enter the amount

S corporations may claim only 1/3 of the credit against the 1.5%

of the credit for the year(s) that you met the milestones. (See your

entity-level tax (3.5% for financial S corporations). The remaining 2/3

credit agreement for further details on meeting milestones and earning

must be disregarded and may not be used as carryover. In

credits.)

addition, S corporations may pass through 100% of the credit to

their shareholders.

Line 2 – Total amounts in column (c). Enter the total here and on Part II,

line 3.

If a taxpayer owns an interest in a disregarded business entity [a single

member limited liability company (SMLLC) not recognized by California,

Part II Available Credit

and for tax purposes is treated as a sole proprietorship owned by an

S corporation, Estate, Trust, Partnership, or LLC

individual or a branch owned by a corporation] the credit amount a

Allocate the line 5 credit to each shareholder, beneficiary, partner, or

taxpayer receives from the disregarded entity that can be utilized is

member in the same way that income and loss are divided.

limited to the difference between the taxpayer’s regular tax figured with

the income of the disregarded entity, and the taxpayer’s regular tax

Line 3 – Enter the credit amount from Part I, line 2, column (c).

figured without the income of the disregarded entity.

Line 4 – Pass-through California Competes Tax Credit

For more information on SMLLC, get Form 568, Limited Liability

If you received more than one pass-through credit from S corporations,

Company Tax Booklet.

estates, trusts, partnerships, or LLCs, add the amounts and enter the

total on line 4. Attach a schedule of the pass-through entities showing

This credit cannot reduce the minimum franchise tax (corporations and

their names, identification numbers, and credit amounts.

S corporations), the annual tax (limited partnerships, limited liability

partnerships, and LLCs classified as a partnership), the alternative

Line 6 – Credit carryover from prior years

minimum tax (corporations, exempt organizations, individuals, and

Enter the amount of credit carryover from prior years on line 6.

fiduciaries), the built-in gains tax (S corporations), or the excess net

Line 8a – Credit claimed

passive income tax (S corporations).

Do not include assigned credits claimed on form FTB 3544A.

If a C corporation had unused credit carryovers when it elected

This amount may be less than the amount on line 7 if your credit

S corporation status, the carryovers were reduced to 1/3 and transferred

is limited by your tax liability. For more information, see General

to the S corporation. The remaining 2/3 were disregarded. The allowable

Information D, Limitations and refer to the credit instructions in your tax

carryovers may be used to offset the 1.5% tax on net income in

booklet. Use credit code 233 when you claim this credit.

accordance with the respective carryover rules. These C corporation

Line 8b – Total credit assigned

carryovers may not be passed through to shareholders. For more

Corporations that assign credit to other corporations within combined

information, get Schedule C (100S), S Corporation Tax Credits.

reporting group must complete form FTB 3544. Enter the total amount

This credit can reduce regular tax below the tentative minimum tax

of credit assigned from form FTB 3544, column (g) on this line.

(TMT). Get Schedule P (100, 100W, 540, 540NR, or 541), Alternative

Minimum Tax and Credit Limitations, for more information.

Part III Credit Recapture

This credit is not refundable.

Line 10 – Credit recapture

If a credit amount was recaptured, the taxpayer would have received

E Assignment of Credits

notification from GO-Biz of the amount and the taxable year of the

recapture. See the “Recapture” section of your credit agreement for

Assigned Credits to Affiliated Corporations – Credit earned by

members of a combined reporting group may be assigned to an affiliated

further details.

corporation that is a member of the same combined reporting group. A

Enter the total recapture here and on one of the following California tax

credit assigned may only be claimed by the affiliated corporation against

returns or schedules:

its tax liability. For more information, get form FTB 3544, Election to

• Form 100, Schedule J, line 5.

Assign Credit Within Combined Reporting Group, or form FTB 3544A,

• Form 100S, Schedule J, line 5 and Schedule K-1 (100S), line 17d.

List of Assigned Credit Received and/or Claimed by Assignee, or go to

• Form 100W, Schedule J, line 5.

ftb.ca.gov and search for credit assignment.

• Form 109, Schedule K, line 4.

F Carryover

• Form 540, line 63.

• Long Form 540NR, line 73.

If the available credit exceeds the current year tax liability, the unused

• Form 541, line 37 and Schedule K-1 (541), line 14d.

credit may be carried over for up to six years or until the credit is

• Form 565, Schedule K, line 20c and Schedule K-1 (565), line 20c.

exhausted, whichever occurs first. In no event can the credit be carried

• Form 568, Schedule K, line 20c and Schedule K-1 (568), line 20c.

back and applied against a prior year’s tax. If you have a carryover, retain

all records that document this credit and carryover used in prior years.

The Franchise Tax Board may require access to these records.

Specific Line Instructions

Name of credit owner – Enter the name of the credit owner or the name

of the entity that generated the tax credit. Also, enter the CA Corporation

no., FEIN, or the California Secretary of State file number of the credit

owner in the space provided. If the name shown on the California return

is the same name as the credit owner, enter “same”.

If you are only claiming a credit that was allocated to you from a

Schedule K-1 (100S, 541, 565 or 568), skip to Part II, line 4 and do not

enter any information in Part I and in Part II, line 3.

Page 2 FTB 3531 Instructions 2016

Form Ftb 3531 - California Competes Tax Credit - 2016 Page 2

Related Articles

Related forms

Related Categories