Form 540 - California Resident Income Tax Return - 2016 Page 9
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17Instructions: Form 540
e-file at ftb.ca.gov
Line 34 – Tax from Schedule G-1 and Form FTB 5870A
Line 40 – Nonrefundable Child and Dependent Care
Expenses Credit
If you received a qualified lump-sum distribution in 2016 and you
were born before January 2, 1936, get California Schedule G-1, Tax on
Claim this credit if you paid someone to care for your qualifying child
Lump-Sum Distributions to figure your tax by special methods that may
under the age of 13, other dependent who is physically or mentally
result in less tax.
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
If you received accumulation distributions from foreign trusts or from
provided in California. To claim this credit, your federal AGI must be
certain domestic trusts, get form FTB 5870A, Tax on Accumulation
$100,000 or less and you must complete and attach form FTB 3506,
Distribution of Trusts, to figure the additional tax.
Child and Dependent Care Expenses Credit, included in this booklet.
To get these forms, see “Order Forms and Publications.”
Line 43 through Line 45 – Additional Special Credits
Special Credits and Nonrefundable Credits
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.
A variety of California tax credits are available to reduce your tax if you
To claim more than two credits, use Schedule P (540), Part III. See
qualify. To figure and claim most special credits, you must complete a
Schedule P (540) instructions, “How to Claim Your Credits.”
separate form or schedule and attach it to your Form 540. The Credit
Important: Attach Schedule P (540) and any supporting schedules or
Chart on page 24 describes the credits and provides the name, credit
statements to your Form 540.
code, and number of the required form or schedule. Many credits are
Carryovers: If you claim a credit with carryover provisions and the
limited to a certain percentage or a certain dollar amount. In addition,
amount of the credit available this year exceeds your tax, carry over any
the total amount you may claim for all credits is limited by tentative
excess credit to future years until the credit is used (unless the carryover
minimum tax (TMT); go to Box A to see if your credits are limited.
period is a fixed number of years). If you claim a credit carryover for
If you are not claiming any special credits go to line 40 and line 46
an expired credit, use form FTB 3540, Credit Carryover and Recapture
to see if you qualify for the nonrefundable child and dependent care
Summary, to figure the amount of the credit. Otherwise, enter the
expenses credit or the nonrefundable renter’s credit.
amount of the credit on Schedule P (540), Part III, and do not attach
form FTB 3540.
Box A – Did you complete federal Schedule C, D, E, or F and claim
Credit for Joint Custody Head of Household — Code 170
or receive any of the following (Note: If your business gross
receipts are less than $1,000,000 from all trades or businesses,
You may not claim this credit if you used the married/RDP filing jointly,
you do not have to report alternative minimum tax (AMT). For
head of household, or qualifying widow(er) filing status.
more information, see line 61 instructions.):
Claim the credit if unmarried and not an RDP at the end of 2016 (or
y Accelerated depreciation in excess of straight-line
if married/or an RDP, you lived apart from your spouse/RDP for all of
y Intangible drilling costs
2016 and you used the married/RDP filing separately filing status);
y Depletion
and if you furnished more than one-half the household expenses for
y Circulation expenditures
your home that also served as the main home of your child, step-child,
y Research and experimental expenditures
or grandchild for at least 146 days but not more than 219 days of the
y Mining exploration/development costs
taxable year. If the child is married/or an RDP, you must be entitled to
y Amortization of pollution control facilities
claim a dependent exemption credit for the child.
y Income/loss from tax shelter farm activities
Also, the custody arrangement for the child must be part of a decree of
y Income/loss from passive activities
dissolution or legal separation or part of a written agreement between
y Income from long-term contracts using the percentage of
the parents where the proceedings have been initiated, but a decree of
completion method
dissolution or legal separation has not yet been issued.
y Pass-through AMT adjustment from an estate or trust reported
on Schedule K-1 (541)
Use the worksheet below to figure the Joint Custody Head of Household
credit using whole dollars only.
Yes Complete Schedule P (540). See “Order Forms and
Publications.”
1. Enter the amount from Form 540, line 35 . . . . . . . . 1
No Go to Box B.
2. Credit percentage — 30% . . . . . . . . . . . . . . . . . . . . 2
x
.30
3. Credit amount. Multiply line 1 by line 2.
Box B – Did you claim or receive any of the following:
Enter the result or $440, whichever is less . . . . . . . 3
y Investment interest expense 226
y Income from incentive stock options in excess of the amount
If you qualify for the Credit for Joint Custody Head of Household and the
reported on your tax return 225
Credit for Dependent Parent, claim only one credit. Select the credit that
y Income from installment sales of certain property
allows the maximum benefit.
Yes Complete Schedule P (540). See “Order Forms and
Credit for Dependent Parent — Code 173
Publications.”
No Go to Box C.
You may not claim the Credit for Dependent Parent if you used the
single, head of household, qualifying widow(er), or married/RDP filing
Box C – If your filing status is:
Is Form 540, line 17 more than:
jointly filing status.
Claim this credit only if all of the following apply:
Single or head of household . . . . . . . . . . . . . . . . . . . . .$251,626
Married/RDP filing jointly or qualifying widow(er) . . . .$335,502
y You were married/or an RDP at the end of 2016 and you used the
Married/RDP filing separately . . . . . . . . . . . . . . . . . . . .$167,749
married/RDP filing separately filing status.
Yes Complete Schedule P (540). See “Order Forms and
y Your spouse/RDP was not a member of your household during the
Publications.”
last six months of the year.
No Your credits are not limited. Go to the instructions for
y You furnished over one-half the household expenses for your
line 40.
dependent mother’s or father’s home, whether or not she or he lived
in your home.
Page 12 Personal Income Tax Booklet 2016
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