Fillable Form 3531 - California Competes Tax Credit

D Limitations

Part I Credit Allocation and Credit Earned

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

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

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

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

Milestones” for the tax credit allocation amounts.)

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

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

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

their shareholders.

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

credit agreement for further details on meeting milestones and earning

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

credits.)

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

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

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

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

line 3.

taxpayer receives from the disregarded entity that can be utilized is

Part II Available Credit

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

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

S corporation, Estate, Trust, Partnership, or LLC

figured without the income of the disregarded entity. Get Form 568,

Allocate the line 3 credit to each shareholder, beneficiary, partner, or

Limited Liability Company Tax Booklet, for more information.

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

This credit cannot reduce the minimum franchise tax (corporations and

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

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

Line 4 – Pass-through California Competes Tax Credit

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

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

minimum tax (corporations, exempt organizations, individuals, and

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

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

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

passive income tax (S corporations).

their names, identification numbers, and credit amounts.

If a C corporation had unused credit carryovers when it elected

Line 6 – Credit carryover from prior years

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

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

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

Line 8a – Credit claimed

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

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

accordance with the respective carryover rules. These C corporation

carryovers may not be passed through to shareholders. For more

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

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

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

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

This credit can reduce regular tax below the tentative minimum tax

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

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

Minimum Tax and Credit Limitations, for more information.

Line 8b – Total credit assigned

Corporations that assign credit to other corporations within combined

This credit is not refundable.

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

E Assignment of Credits

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

Assigned Credits to Affiliated Corporations – Credit earned by

Part III Credit Recapture

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

Line 10 – Credit recapture

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

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

credit assigned may only be claimed by the affiliated corporation against

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

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

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

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

further details.

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

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

ftb.ca.gov and search for credit assignment.

returns or schedules:

F Carryover

• Form 100, Schedule J, line 5.

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

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

• Form 100W, Schedule J, line 5.

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

• Form 109, Schedule K, line 4.

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

• Form 540, line 63.

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

• Long Form 540NR, line 73.

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

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

The Franchise Tax Board may require access to these records.

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

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

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 (NEW 2015)

Form 3531 - California Competes Tax Credit - 2015 Page 2

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