Fillable California Schedule S - Other State Tax Credit

with the states listed above as well as Arizona,

Beneficiary of an Estate or Trust

S corporations that paid a net income tax to

Indiana, Oregon, or Virginia may also claim a

A beneficiary of an estate or trust who is a

another state on income that must be reported

credit for their share of income taxes paid to

California resident and pays California tax on

to California may also claim the other state tax

these states, unless any of these states allow a

income that has been taxed to the estate or

credit. See Sections F, Dual-Resident Estates

credit for taxes paid to California on the group

trust in another state may also claim the credit.

and Trusts, and G, Pass-Through Entities, for

nonresident tax return.

The credit is limited to both of the following:

more information.

Attach a statement and schedule showing your

1. The proportion of the tax paid to the other

B Application of the Credit

share of the net income tax paid to the other

state by the estate or trust that income taxed

Credit is allowed for net income taxes paid to

state.

to the beneficiary in California and also to

another state (not including any tax comparable

the estate or trust in the other state bears to

*A dual resident is any taxpayer who is defined

to California’s alternative minimum tax) on

the total income taxed by the other state.

as a California resident under California law

income that is also subject to California tax.

and a Virginia resident under Virginia law. If

2. The proportion of the beneficiary’s California

The credit is applied against California net tax,

you are a dual resident, you are allowed to

tax that the income taxed to the beneficiary

less other credits. The credit cannot be applied

claim the other state tax credit for taxes paid

in California and also to the estate or trust

against California alternative minimum tax.

to Virginia on Virginia source income. Dual

in the other state bears to the beneficiary’s

When a joint tax return is filed in California,

residents who are elected or appointed officials

total income taxed by California.

the entire amount of tax paid to the other state

and staff as defined in R&TC Section 17014(b)

Attach a copy of Schedule K-1 (541),

may be used in figuring the credit, regardless

may claim the other state tax credit for taxes

Beneficiary’s Share of Income, Deductions,

of which spouse/RDP paid the other state tax

paid to Virginia on all income taxed by Virginia

Credits, etc., and a schedule showing your

or whether a joint or separate tax return is filed

whether or not it has a source in Virginia. (See

share of the net income tax paid to the other

in the other state.

Section H, Income from Sources Within the

state.

Other State.)

When a joint tax return is filed in the other

G Pass-Through Entities

state and separate California tax returns are

D California Nonresidents

filed, the credit is allowed in proportion to the

A partner is allowed a credit for the partner’s

California nonresident individuals, estates, or

income reported on each California tax return.

share of net income taxes paid by the

trusts that are residents of one of the following

If, after paying tax to the other state, you

partnership to another state. A shareholder

states or U.S. possessions and paid a net

of an S corporation is allowed a credit for the

get a refund or credit due to an amended tax

income tax to that state or U.S. possession

shareholder’s share of net income taxes paid

return, computation error, audit, etc., you

on income that is also taxed by California may

by the S corporation to another state that

must report the refund or credit immediately

claim the other state tax credit:

to the Franchise Tax Board (FTB). Prepare a

either does not allow S corporation elections

Arizona, Guam, Indiana, Oregon, and

or imposes tax on S corporations and the

revised Schedule S and attach it to any of the

Virginia.

S corporation elected to be treated as an

following:

S corporation in the other state. A member of

California nonresidents who are residents of

• Form 540X, Amended Individual Income

an LLC classified as a partnership is allowed a

any state or U.S. possession not listed may not

Tax Return, if you filed Form 540 or Long

credit for the member’s distributive share of net

claim this credit. This credit is not allowed on a

Form 540NR.

income taxes paid by the LLC to another state.

California group nonresident tax return.

• Form 541, California Fiduciary Income

Attach a copy of Schedule K-1 (100S, 565, or

Tax Return, if you filed Form 541. Check

E California Part-Year Residents

568), Share of Income, Deductions, Credits,

“Amended return” box below fiduciary ad-

California part-year residents:

etc., and a schedule showing your share of the

dress area on Side 1.

net income tax paid to the other state.

• Follow the instructions for residents for the

C California Residents

part of the year that you were a California

H Income from Sources Within

California resident individuals, estates, or

resident.

the Other State

trusts that derived income from sources within

• Follow the instructions for nonresidents

any of the following states or U.S. possessions

Residents of California may claim a credit

for the part of the year that you were a

and paid a net income tax to that state or U.S.

for net income taxes imposed by and paid

nonresident.

possession on income that is also taxed by

to another state only on income which has a

F Dual-Resident Estates and

California may claim the other state tax credit:

source within the other state.

Trusts

Alabama, American Samoa, Arkansas,

For this purpose, California’s sourcing

Colorado, Connecticut, Delaware, Georgia,

principles apply even though the results may

An estate or trust may claim a credit if it is

Hawaii, Idaho, Illinois, Iowa, Kansas,

be contrary to the other states’ principles. The

treated as a “resident” of California and also as

Kentucky, Louisiana, Maine, Maryland,

following describes the sources of various

a “resident” of another state. For this purpose

Massachusetts, Michigan, Minnesota,

types of income:

an estate or trust is considered a resident of

Mississippi, Missouri, Montana, Nebraska,

any state that taxes the trust or estate based

• Compensation for services rendered by

New Hampshire (business profits tax),

on its net income. An estate or trust will not

employees or independent contractors has a

New Jersey, New Mexico, New York,

be considered a resident where the other state

source where the services are performed.

North Carolina, North Dakota, Ohio,

is taxing the entity solely because of income

• Income from tangible personal property and

Oklahoma, Pennsylvania, Puerto Rico,

sourced in the other taxing state. The credit is

real estate has a source where the property

Rhode Island, South Carolina, Utah,

limited to:

is located.

Vermont, Virginia (dual residents*), Virgin

1. The proportion of the tax paid to the other

Islands, West Virginia, Wisconsin, and

• Income from intangible personal property

state by the estate or trust that the double-

the District of Columbia (unincorporated

(such as interest and dividends) generally

taxed income bears to the total income taxed

business tax and income tax, the latter for

has a source where the owner resides.

by the other state.

dual residents only).

• Business income has a source where the

2. The proportion of the estate’s or trust’s

California residents who are included in a

business is conducted.

California tax that the double-taxed income

group nonresident tax return similar to the

bears to the total income taxed by California.

tax return described in California Revenue &

Taxation Code (R&TC) Section 18535, filed

Page 2 Schedule S 2013

California Schedule S - Other State Tax Credit - 2013 Page 2

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