Form 3596 - Paid Preparer'S California Earned Income Tax Credit Checklist

2015 Instructions for Form FTB 3596

Paid Preparer's California Earned Income Tax Credit Checklist

References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and to the California Revenue and Taxation Code (R&TC).

General Information

Line 6

For Form 540 2EZ and Short Form 540 NR filers, investment income

In general, for taxable years beginning on or after January 1, 2015,

is the total of the taxpayer's California source taxable interest income,

California law conforms to the IRC as of January 1, 2015. However,

tax-exempt interest income, ordinary dividends, and capital gain or

there are continuing differences between California and federal law.

loss. However, see the instructions for form FTB 3514, California Earned

When California conforms to federal tax law changes, we do not always

Income Tax Credit, Worksheet 2, Investment Income Form 540 and Long

adopt all of the changes made at the federal level. For more information,

Form 540NR Filers to figure investment income if the taxpayer:

go to ftb.ca.gov and search for conformity. Additional information

y Files form FTB 3803, Parents' Election to Report Child's Interest and

can be found in FTB Pub. 1001, Supplemental Guidelines to California

Dividends, or

Adjustments, the instructions for California Schedule CA (540 or 540NR),

y Files Schedule D-1, Sale of Business Property, or

and the Business Entity tax booklets.

y Has income or loss from a passive activity , or

The instructions provided with California tax forms are a summary of

y Reports income on Schedule CA (540), California

California tax law and are only intended to aid taxpayers in preparing

Adjustments – Residents, or Schedule CA (540NR), California

their state income tax returns. We include information that is most useful

Adjustments – Nonresidents, line 21 from the rental of personal

to the greatest number of taxpayers in the limited space available. It is

property not used in a trade or business, or

not possible to include all requirements of the California Revenue and

y Reports expenses on Schedule CA (540) or Schedule CA (540NR),

Taxation Code (R&TC) in the tax booklets. Taxpayers should not consider

line 36 from the rental of personal property not used in a trade or

the tax booklets as authoritative law.

business.

Registered Domestic Partners (RDPs) For purposes of California

Line 7

income tax, references to a spouse/RDP, husband, or wife also refer to a

If the taxpayer is a qualifying child of another taxpayer, the taxpayer

California registered domestic partner (RDP), unless otherwise specified.

cannot claim the EITC. This is true even if the person for whom the

When we use the initials RDP they refer to both a California registered

taxpayer is a qualifying child does not claim the EITC or meet all of the

domestic “partner” and a California registered domestic “partnership,”

rules to claim the EITC.

as applicable. For more information on RDPs, get FTB Pub. 737, Tax

Information for Registered Domestic Partners.

The taxpayer is a qualifying child of another taxpayer (the taxpayer's

parent, guardian, foster parent, etc.) if all of the following statements are

Purpose

true:

1. The taxpayer is that person's son, daughter, stepchild, foster child, or

Paid preparers of California income tax returns or claims for refund

a descendant of any of them. Or, the taxpayer is that person's brother,

involving the EITC must meet due diligence requirements in determining

sister, half brother, half sister, stepbrother, stepsister, or a descendant

the taxpayer's eligibility for, and the amount of, the EITC. Failure to do

of any of them.

so could result in a $500 penalty for each failure. See California R&TC

2. The taxpayer was:

Section 19167(a)(5) and Part IV of the this form.

a. Under age 19 at the end of the year and younger than that person

Only paid preparers have to complete this form. If you were paid to

(or that person's spouse/RDP, if the person files jointly),

complete a tax return for any taxpayer claiming the California earned

b. Under age 24 at the end of the year, a student, and younger than

income tax credit (EITC), attach the completed form FTB 3596, Paid

that person (or that person's spouse/RDP, if the person files

Preparer's California Earned Income Tax Credit Checklist to Form 540 or

jointly), or

Form 540 2EZ, California Resident Income Tax Return, or Long or Short

c. Permanently and totally disabled, regardless of age.

Form 540NR, California Nonresident or Part-Year Resident Income Tax

3. The taxpayer lived with that person in California for more than half of

Return.

the year.

Specific Line Instructions

4. The taxpayer is not filing a joint return for the year (or is filing a joint

return only to claim a refund of withheld income tax or estimated tax

Part I – All Taxpayers

paid).

However, the taxpayer is not the qualifying child of another taxpayer (and

Line 1a and 1b: Enter the name and preparer tax identification number

so may qualify to claim the EITC) if the person for whom the taxpayer

(PTIN) of the preparer who determined the taxpayer's eligibility for, or the

meets the relationship, age, residency, and joint return tests described is

amount of, the EITC, even if that preparer is not the signing preparer.

not required to file an income tax return, and either:

Line 1c and 1d: Enter the state where the tax preparer was licensed,

y Does not file an income tax return, or

registered or enrolled; and provide the tax preparer’s license, registration

y Files a return only to get a refund of income tax withheld or estimated

or enrollment number.

tax paid.

Line 3

For examples and more details, get federal Publication 596, Earned

Valid SSN. For the EITC, a valid SSN is a number issued by the Social

Income Credit (EIC).

Security Administration unless “Not Valid for Employment” is printed on

the social security card and the number was issued solely to allow the

recipient of the SSN to apply for or receive a federally funded benefit.

However, if “Valid for Work Only With DHS Authorization” is printed on

the social security card, the SSN is valid for EITC purposes only as long

as the DHS (Department of Homeland Security) authorization is still valid.

An ITIN, Individual Taxpayer Identification Number or ATIN, Adoption

Taxpayer Identification Number cannot be used to claim EITC.

FTB 3596 Instructions (NEW 2015) Page 1

Form 3596 - Paid Preparer'S California Earned Income Tax Credit Checklist - 2015 Page 6

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