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Corporate Overpayment Rates

Mandatory Electronic Payments. Individuals are

Schedule K-1 (100S, 541, 565, or 568) or on a

required to remit all your payments electronically once

separate statement for its taxable year in which the

Use the chart below to compute corporate

you make an estimate or extension payment exceeding

contracts are completed or adjusted.

overpayments. Beginning July 1, 2002, the interest

$20,000 or you file an original tax return with a total tax

allowed on corporate overpayments differs from

If you are reporting line 1 amounts from more than

liability over $80,000. Once you meet this threshold, all

personal income tax overpayments.

one Schedule K-1 (100S, 541, 565, or 568) or similar

subsequent payments regardless of amount, tax type,

statement, you must attach a schedule detailing by

Period

Corporate Overpayment Rate

or taxable year must be remitted electronically. The

entity, the net change to income from long-term

July 1, 2002, through June 30, 2003 . . . . . . . . . 2%

first payment that would trigger the mandatory e-pay

contracts.

July 1, 2003, through June 30, 2005 . . . . . . . . . 1%

requirement does not have to be made electronically.

July 1, 2005, through December 31, 2005 . . . . . 2%

See Specific Line Instructions, Line 2, Net

Individuals that do not send the payment electronically

January 1, 2006, through June 30, 2006 . . . . . . 3%

Adjustment, on page 2.

will be subject to a 1% noncompliance penalty. You can

July 1, 2006, through December 31, 2006 . . . . . 4%

request a waiver from mandatory e-pay if one or more

Line 2 – Multiply the amount on line 1 by the

January 1, 2007, through June 30, 2008 . . . . . . 5%

of the following is true:

applicable regular tax rate for each prior year shown

July 1, 2008, through December 31, 2008 . . . . . 3%

•

You have not made an estimated tax or extension

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

January 1, 2009, through June 30, 2009 . . . . . . 2%

payment in excess of $20,000 during the current

rate is as follows:

July 1, 2009, through December 31, 2011 . . . . . 0%

or previous taxable year.

Entity

Regular rate

January 1, 2012 to present . . . . . . . . . . . . . . . . . 0%

•

Your total tax liability reported for the previous

(a) Individuals and pass-through entities in which,

taxable year did not exceed $80,000.

Contracts Completed in Taxable Years Beginning

at all times during the year, more than 50% of

•

The amount you paid is not representative of your

On or After January 1, 2013

the interests in the entity are held by individuals

total tax liability.

For contracts completed in taxable years beginning

directly or through other pass-through entities:

on or after January 1, 2013, the interest rate is

Electronic payments can be made using Web Pay on

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

determined for each interest accrual period. The

FTB’s website, electronic funds withdrawal (EFW) as

Taxable years beginning after 1986

interest accrual period starts on the day after the

part of the e-file return, or your credit card. For more

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

return due date (not including extensions) for each

information or to obtain the waiver form, go to

Taxable years beginning after 1990

prior taxable year and ends on the return due date

ftb.ca.gov and search for mandatory epay.

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

for the following taxable year. Using the charts

Fiduciaries, estates, and trusts are not required to make

Taxable years beginning after 1995

above, the interest rate in effect for the entire interest

payments electronically, regardless of the amount owed.

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

accrual period is the rate for the period in which the

Taxable years beginning after 2009

interest accrual period begins.

Part II — Simplified Marginal

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

Line 9 and Line 10 – Individuals, estates, or trusts,

Taxable years beginning after 2011

Impact Method

sign Side 2 and file form FTB 3834 as a separate return

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

(do not attach it to Form 540, Long Form 540NR,

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

Part II is used only by pass-through entities required

or Form 541). Mail form FTB 3834 in an envelope

(b) S corporations:

to apply the look-back method at the entity level and

separate from that of your California tax return.

Taxable years beginning after

taxpayers electing (or with an election in effect) to use

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

Corporations, S corporations, exempt organizations,

the simplified marginal impact method. See General

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

partnerships, and LLCs are not required to sign form

Information H, Simplified Marginal Impact Method.

FTB 3834.

To elect the simplified marginal impact method,

included in (a) or (b) above:

Corporations (other than S corporations) may deduct

attach a statement to form FTB 3834 for the first

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

this amount as an interest expense for the taxable

taxable year of the election. The statement must

Taxable years ending after 1986

year in which it is paid or incurred. This interest is

indicate that you are making an election under

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

not deductible for individuals and other noncorporate

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

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

taxpayers.

marginal impact method. Once made, the election

Corporations cannot reduce their tax below the

applies to all applications of the look-back method in

Corporations, S corporations, partnerships, LLCs, and

minimum franchise tax.

the year of the election and all later years, unless the

exempt organizations with unrelated business income,

FTB consents to a revocation of the election.

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

attach form FTB 3834 to their California tax return and

complete line 3 in the same manner, using only

enter the amount due or the amount to be refunded on

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

income and deductions allowed for AMT purposes.

the appropriate schedule of their tax return as follows:

column the ending month and year for each prior

•

Corporations, enter the amount due or the

taxable year in which you were required to report

Line 4 – Multiply the amount on line 3 by the

amount to be refunded on Form 100, Schedule J

income from the completed long-term contract.

applicable AMT rate as follows:

or Form 100W, Schedule J.

Line 1 – In each column, show a net increase to

Entity

AMT rate

•

S corporations, enter the amount due or the

income as a positive amount and a net decrease

(a) Individuals and pass-through entities in which,

amount to be refunded on Form 100S, Schedule J.

to income as a negative amount. For apportioning

at all times during the year, more than 50% of

•

Partnerships, enter the amount due or the amount

taxpayers, the net increase or net decrease to income

the interests in the entity are held by individuals

to be refunded on Form 565, line 28 or line 30.

is after apportionment. For more information, see

directly or through other pass-through entities:

•

LLCs, enter the amount due or the amount to be

Cal. Code Regs., tit. 18 section 25137-2.

Taxable years beginning after 1986

refunded on Form 568, line 10 or line 11.

Attach separate schedules for regular taxable income

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

•

Exempt corporations or other organizations with

and AMTI that include the following:

Taxable years beginning after 1990

unrelated business income, enter the amount

•

Identification of each completed long-term

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

due or the amount to be refunded on Form 109,

contract by contract number, job name, or any

Taxable years beginning after 1996

Schedule K.

other reasonable method used in your records to

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

If you have a refund (line 9), mail form FTB 3834 to:

identify each contract.

Taxable years beginning after 2008

FRANCHISE TAX BOARD

•

The amount of income previously reported for

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

PO BOX 942840

each contract based on estimated contract price

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

SACRAMENTO CA 94240-0001

and costs for each prior year.

(b) Corporations and pass-through entities not

•

The amount of income for each contract allocable

included in (a) above:

If you owe interest (line 10) and are not paying

to each prior year based on actual contract price

Taxable years ending after 1986

electronically, make a check or money order, using

and costs.

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

black or blue ink, payable to “Franchise Tax Board” for

•

The net adjustment to income from long-term

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

the full amount. Write your social security number,

contracts for each prior year.

individual taxpayer identification number, or California

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

•

Any other adjustments that result in a change to

corporation number, the taxable year, and “FTB 3834”

whichever amount is larger. Treat both numbers as

income due to long-term contracts.

on the check or money order. Enclose, but do not

positive when making this comparison, but enter the

staple, payment with form FTB 3834 and mail to:

An owner of an interest in a pass-through entity

amount as a negative number. If the amount on one

is not required to provide the detail listed in the

line is negative, but the amount on the other line is

FRANCHISE TAX BOARD

first three items above with respect to prior years.

positive, enter the positive amount on line 5.

PO BOX 942867

The entity should provide line 1 amounts on

SACRAMENTO CA 94267-0001

FTB 3834 Instructions 2013 Page 3

Instructions For Form Ftb 3834 - Interest Computation Under The Look-Back Method For Completed Long-Term Contracts - 2013 Page 3

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