Instructions For Form 540 - California Resident Income Tax Return

Instructions: Form 540

e-file at ftb.ca.gov

Line 43 through Line 45 – Additional Special Credits

Box A – Did you complete federal Schedule C, D, E, or F and claim or receive

A code identifies each credit. To claim only one or two credits, enter the

any of the following (Note: If your business gross receipts are less

credit name, code, and amount of the credit on line 43 and line 44.

than $1,000,000 from all trades or businesses, you do not have to

report alternative minimum tax (AMT). For more information, see

To claim more than two credits, use Schedule P (540), Part III. See

line 61 instructions, on page 11.):

Schedule P (540) instructions, “How to Claim Your Credits.”

Do not claim the New Jobs credit on line 43, line 44, or line 45. Only use

• Accelerated depreciation in excess of straight-line

line 42 to claim the New Jobs credit.

• Intangible drilling costs

• Depletion

Important: Attach Schedule P (540) and any supporting schedules or

• Circulation expenditures

statements to your Form 540.

• Research and experimental expenditures

Carryovers: If you claim a credit with carryover provisions and the amount

• Mining exploration/development costs

of the credit available this year exceeds your tax, carry over any excess

• Amortization of pollution control facilities

credit to future years until the credit is used (unless the carryover period

• Income/loss from tax shelter farm activities

is a fixed number of years). If you claim a credit carryover for an expired

• Income/loss from passive activities

credit, use form FTB 3540, Credit Carryover and Recapture Summary, to

• Income from long-term contracts using the percentage of

figure the amount of the credit. Otherwise, enter the amount of the credit on

completion method

Schedule P (540), Part III, and do not attach form FTB 3540.

• Pass-through AMT adjustment from an estate or trust

Credit for Joint Custody Head of Household — Code 170

reported on Schedule K-1 (541)

You may not claim this credit if you used the married/RDP filing jointly, head

Yes Complete Schedule P (540). See “Order Forms and

Publications” on page 67.

of household, or qualifying widow(er) filing status.

Go to Box B.

Claim the credit if unmarried and not an RDP at the end of 2013 (or if

married/or an RDP, you lived apart from your spouse/RDP for all of 2013

Box B – Did you claim or receive any of the following:

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

• Investment interest expense  226

also served as the main home of your child, step-child, or grandchild for at

• Income from incentive stock options in excess of the amount

least 146 days but not more than 219 days of the taxable year. If the child

reported on your tax return  225

is married or an RDP, you must be entitled to claim a dependent exemption

• Income from installment sales of certain property

credit for the child.

Yes Complete Schedule P (540). See “Order Forms and

Also, the custody arrangement for the child must be part of a decree of

Publications” on page 67.

dissolution or legal separation or part of a written agreement between the

No Go to Box C.

parents where the proceedings have been initiated, but a decree of dissolution

or legal separation has not yet been issued.

Box C – If your filing status is:

Is Form 540, line 17 more than:

Use the worksheet below to figure the Joint Custody Head of Household

Single or head of household. . . . . . . . . . . . . . . . . . . . . . . . $238,051

credit using whole dollars only.

Married/RDP filing jointly or qualifying widow(er) . . . . . . . $317,401

Married/RDP filing separately. . . . . . . . . . . . . . . . . . . . . . . $158,700

1. Enter the amount from Form 540, line 35 . . . . . . . . . . . 1

2. Credit percentage — 30% . . . . . . . . . . . . . . . . . . . . . . . 2

.30

Yes Complete Schedule P (540). See “Order Forms and

3. Credit amount. Multiply line 1 by line 2.

Publications” on page 67.

Enter the result or $416, whichever is less . . . . . . . . . . 3

No Your credits are not limited. Go to the instructions for

line 40.

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

Line 40 – Nonrefundable Child and Dependent Care

allows the maximum benefit.

Expenses Credit

Credit for Dependent Parent — Code 173

Claim this credit if you paid someone to care for your qualifying child under

You may not claim the Credit for Dependent Parent if you used the single,

the age of 13, other dependent who is physically or mentally incapable of

head of household, qualifying widow(er), or married/RDP filing jointly filing

caring for him or herself, or spouse/RDP if physically or mentally incapable

status.

of caring for him or herself. The care must be provided in California. To

Claim this credit only if all of the following apply:

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

• You were married/or an RDP at the end of 2013 and you used the

Credit, included in this booklet.

married/RDP filing separately filing status.

• Your spouse/RDP was not a member of your household during the last

Line 41 and Line 42 – New Jobs Credit

six months of the year.

Qualified employers who had a net increase of qualified employees during

• You furnished over one-half the household expenses for your dependent

the current taxable year or qualified employers who first commenced

mother’s or father’s home, whether or not she or he lived in your home.

business in California during the current taxable year may be eligible to claim

To figure the amount of this credit, use the worksheet above for the Credit

this credit. Use form FTB 3527, New Jobs Credit, to determine the amount of

for Joint Custody Head of Household. If you qualify for the Credit for Joint

the credit available. Enter on line 41 the amount of the credit generated from

Custody Head of Household and the Credit for Dependent Parent, claim only

form FTB 3527, line 18.

one. Select the credit that will allow the maximum benefit.

Answer the following question to determine the amount of the credit you can

Credit for Senior Head of Household — Code 163

claim. Are you required to complete Schedule P (540)?

You may claim this credit if you:

Yes Enter on line 42 the amount of the New Jobs credit claimed from

Schedule P (540), Part III.

• Were 65 years of age or older on December 31, 2013.*

• Qualified as a head of household in 2011 or 2012 by providing a

Use this worksheet to figure the credit.

household for a qualifying individual who died during 2011 or 2012.

1. Enter the amount from Form 540, line 35. . . . . . . . . . . 1_____________

• Did not have AGI over $67,520 for 2013.

2. Enter the amount from form FTB 3527, line 21 . . . . . . . 2_____________

* If your 65th birthday is on January 1, 2014, you are considered to be

3. Enter the smaller of line 1 or line 2 here and on

age 65 on December 31, 2013.

Form 540, line 42

and form FTB 3527, line 22a . . . . . 3_____________

If you have other credits with limited carryovers, you may want to apply

those credits first on line 43 through line 45 before claiming the New Jobs

credit on line 42.

Important: Attach form FTB 3527 and Schedule P (540) to your Form 540.

Page 10 Personal Income Tax Booklet 2013

Instructions For Form 540 - California Resident Income Tax Return - 2013 Page 4

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