Looking for a California Tax Forms And Templates? Download it for free!

2014 Instructions for Form FTB 3544

Election to Assign Credit Within Combined Reporting Group

References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2009, and to the California Revenue and Taxation Code (R&TC).

Important Information

between California and federal law. When

Eligible assignee. Eligible assignee is any

California conforms to federal tax law changes,

affiliated corporation that is a member of the

For taxable years beginning on or after July 1,

we do not always adopt all of the changes made

same combined reporting group (under R&TC

2008, California Revenue and Taxation Code

at the federal level. For more information, go to

Section 25101 or 25110) as the assignor on:

(R&TC) Section 23663 allows a taxpayer to assign

ftb.ca.gov and search for conformity. Additional

(1) June 30, 2008, and the last day of the taxable

an “eligible credit” to any “eligible assignee.”

information can be found in FTB Pub. 1001,

year in which the credit was assigned to the

A credit assigned may only be claimed against

Supplemental Guidelines to California

assignee, for credits generated in taxable

the tax of the eligible assignee in a taxable year

Adjustments, the instructions for California

years beginning before July 1, 2008, or

beginning on or after January 1, 2010. For more

Schedule CA (540 or 540NR), and the Business

(2) The last day of the taxable year in which

information, see R&TC Section 23663 or go to

Entity tax booklets.

the credit was first allowed to the assignor

ftb.ca.gov and search for credit assignment.

The instructions provided with California tax

and the last day of the taxable year in which

After assignment of an eligible credit, the assignee

forms are a summary of California tax law and are

the credit was assigned to the assignee, for

shall be treated as if it originally generated the

only intended to aid taxpayers in preparing their

credits generated in taxable years beginning

assigned credit. All restrictions and limitations,

state income tax returns. We include information

on or after July 1, 2008.

including any carryover limitations that applied to

that is most useful to the greatest number of

the assignor (entity that originally generated the

C Disclosure of Limitations

taxpayers in the limited space available. It is

credit) will also apply to the assignee.

not possible to include all requirements of the

and Restrictions

California R&TC in the tax booklets. Taxpayers

The election to assign any credit is irrevocable.

should not consider the tax booklets as

The assignor shall make the election and report

The eligible assignee shall be treated as if it

authoritative law.

the credit assignment by completing form

originally generated the assigned credit. Any

FTB 3544, Election to Assign Credit Within

credit limitations or restrictions that applied to the

A Purpose

Combined Reporting Group, and attach it to the

assignor will also apply to the eligible assignee.

assignor’s original tax return for the taxable year

The assignor shall disclose the existence and

Use form FTB 3544 to report the following:

the assignment is made. A credit assignment will

nature of any assigned credit limitations to the

• The election to assign credits to a member of

not be allowed if form FTB 3544 is attached to

eligible assignee and to the FTB. Such limitations

the combined reporting group.

an amended tax return. Once a credit is assigned

may include, but are not limited to:

• The assignment (assignor‘s information,

to an assignee, the assigned credit cannot be

• Limitations imposed on the credit to certain

assignee’s information, and the amount of the

reassigned to another assignee. The assignor will

types of income, such as income from one of

credit assigned).

reduce the credit amount available for assignment

the former California Enterprise Zones.

by the amount used by the assignor and the

Attach additional form(s) FTB 3544, if necessary.

• Limitations imposed by California’s

amount of the credit assigned.

When attaching form FTB 3544 to the original

incorporation of IRC Section 383.

Any portion of the California Motion Picture and

tax return, make sure to check the “Yes” box on

• Limitations on the number of years the

Television Production Credit assigned under either

Side 1, Schedule Q, Question B5 of the Form 100,

assigned credits may be carried forward.

R&TC Section 23663 or Section 23685 may not

California Corporation Franchise or Income Tax

In addition to the requirement to separately list

be subsequently assigned under either statute.

Return, or Form 100W, California Corporation

credits generated in different taxable years, the

Franchise or Income Tax Return – Water’s-Edge

There is no requirement of payment for

assignor must separately list credits which are

Filers.

assignment of credit by an eligible assignee to

subject to separate and distinct limitations and

an assignor. If the eligible assignee makes a

When filing a combined report and more than

disclose each of those separate and distinct

payment for receiving the assignment of credit,

one credit is being assigned, file a separate form

limitations in a statement to be attached to form

the payment is not a deductible expense for the

FTB 3544 for each credit and attach it to Form 100

FTB 3544.

assignee nor income to the assignor.

or Form 100W. For example, Corporations A, B,

For example, the amount of EZ credit allowable

and C are members of a unitary group filing a

The assignor who assigns a credit shall complete

for use is limited to the tax on income attributable

combined report. If Corporation A is assigning

all of the information requested on form

to that enterprise zone. For zone credits assigned,

Research and Development (R&D) credit and

FTB 3544. Attach additional form(s) FTB 3544,

the assignee must have a tax liability on the

Enterprise Zone (EZ) credit to Corporations B

if necessary. Schedules or substitute forms,

income attributable to the same zone that the

and C, Corporation A shall complete and attach

other than Franchise Tax Board (FTB) approved

original credit was generated. If the original credit

two forms FTB 3544 to the original tax return. One

computer-generated substitute versions of form

was generated in the Fresno enterprise zone of

form is for the R&D credit and one form is for the

FTB 3544, will not be accepted.

the assignor, the assignee must have a tax liability

EZ credit.

on the income attributable to the former Fresno

Also, the assignor shall maintain the information

enterprise zone.

necessary to substantiate any credit assigned and

B Definitions

to verify the assignment and subsequent use of

Also, when a corporation has an “ownership

the credit assigned. Lack of substantiation may

Eligible credit. Eligible credit means any credit

change” as defined in IRC Section 382, tax credits

result in the disallowance of the assignment. The

generated by the taxpayer in a taxable year

may be subject to limitations imposed under IRC

assignor and the eligible assignee shall each be

beginning on or after July 1, 2008, or any credit

Section 383. In such situations, the annual use of

liable for the full amount of any tax, addition to

generated in any taxable year beginning before

credits is limited to an amount determined under

tax, or penalty that results from any disallowance

July 1, 2008, that is eligible to be carried forward

IRC Section 383.

of any eligible credit assigned under R&TC

to the taxpayer’s first taxable year beginning on or

Another example is that the assignor has an

Section 23663, and the FTB may collect such

after July 1, 2008.

Environmental Tax Credit generated during the

amount in full from either the assignor or the

Assignor. The assignor is the taxpayer that

2010 taxable year. The credit has not been used

eligible assignee.

originally generated the eligible credit (or is

and was carried forward and assigned in the

allowed the credit as a distributive share item)

2014 taxable year. The credit carryover will expire

General Information

and assigned the eligible credit to an eligible

in the 2021 taxable year, based on the date that

assignee. Any taxpayer-member of the combined

the assignor originally generated the credit. The

In general, for taxable years beginning on or after

reporting group that includes the eligible assignee

credit carryover will expire for the assignee in the

January 1, 2010, California law conforms to the

is a possible assignor.

2021 taxable year, unless the carryover period is

Internal Revenue Code (IRC) as of January 1,

extended by law.

2009. However, there are continuing differences

FTB 3544 Instructions 2014 Page 1

Form 3544 - California Election To Assign Credit Within Combined Reporting Group - 2014 Page 2

Related Articles

Related forms

Related Categories