California Form 3544 - Election To Assign Credit Within Combined Reporting Group - 2012 Page 2
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3Instructions 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
General Information
Assignor. The assignor is the taxpayer that
originally generated the eligible credit (or
For taxable years beginning on or after July 1,
In general, for taxable years beginning on or
is allowed the credit as a distributive share
2008, California Revenue and Taxation Code
after January 1, 2010, California law conforms
item) and assigned the eligible credit to an
(R&TC) Section 23663 allows a taxpayer to
to the Internal Revenue Code (IRC) as of
eligible assignee. Any taxpayer-member of the
assign an “eligible credit” to any “eligible
January 1, 2009. However, there are continuing
combined reporting group that includes the
assignee.” A credit assigned may only be
differences between California and federal
eligible assignee is a possible assignor.
claimed against the tax of the eligible assignee
law. When California conforms to federal tax
Eligible assignee. Eligible assignee is any
in a taxable year beginning on or after
law changes, we do not always adopt all of
affiliated corporation that is a member of the
January 1, 2010. For more information, see
the changes made at the federal level. For
same combined reporting group (under R&TC
R&TC Section 23663 or go to ftb.ca.gov and
more information, go to ftb.ca.gov and search
Section 25101 or 25110) as the assignor on:
search for credit assignment.
for conformity. Additional information can
(1) June 30, 2008, and the last day of the
be found in FTB Pub. 1001, Supplemental
After assignment of an eligible credit, the
taxable year in which the credit was
Guidelines to California Adjustments, the
assignee shall be treated as if it originally
assigned to the assignee, for credits
instructions for California Schedule CA (540 or
generated the assigned credit. All restrictions
generated in taxable years beginning
540NR), and the Business Entity tax booklets.
and limitations, including any carryover
before July 1, 2008, or
limitations that applied to the assignor (entity
The instructions provided with California tax
(2) The last day of the taxable year in which
that originally generated the credit) will also
forms are a summary of California tax law
the credit was first allowed to the assignor
apply to the assignee.
and are only intended to aid taxpayers in
and the last day of the taxable year in which
preparing their state income tax returns. We
The election to assign any credit is
the credit was assigned to the assignee,
include information that is most useful to the
irrevocable. The assignor shall make the
for credits generated in taxable years
greatest number of taxpayers in the limited
election and report the credit assignment by
beginning on or after July 1, 2008.
space available. It is not possible to include all
completing form FTB 3544, Election to Assign
requirements of the California R&TC in the tax
Credit Within Combined Reporting Group, and
C Disclosure of Limitations
booklets. Taxpayers should not consider the
attach it to the assignor’s original tax return
and Restrictions
tax booklets as authoritative law.
for the taxable year the assignment is made.
A credit assignment will not be allowed if form
A Purpose
The eligible assignee shall be treated as if it
FTB 3544 is attached to an amended tax return.
originally generated the assigned credit. Any
Once a credit is assigned to an assignee,
Use form FTB 3544 to report the following:
credit limitations or restrictions that applied
the assigned credit cannot be reassigned to
to the assignor will also apply to the eligible
• The election to assign credits to a member
another assignee. The assignor will reduce the
assignee. The assignor shall disclose the
of the combined reporting group.
credit amount available for assignment by the
existence and nature of any assigned credit
• The assignment (assignor‘s information,
amount used by the assignor and the amount
limitations to the eligible assignee and to the
assignee’s information, and the amount of
of the credit assigned.
FTB. Such limitations may include, but are not
the credit assigned).
Any portion of the California Motion Picture
limited to:
Attach additional form(s) FTB 3544, if necessary.
and Television Production Credit assigned
• Limitations imposed on the credit to certain
When attaching form FTB 3544 to the original
under either R&TC Section 23663 or
types of income, such as income from one
tax return, make sure to check the “Yes” box
Section 23685 may not be subsequently
of the California Enterprise Zones.
on Side 1, Schedule Q, Question B5 of the
assigned under either statute.
• Limitations imposed by California’s
Form 100, California Corporation Franchise or
There is no requirement of payment for
incorporation of IRC Section 383.
Income Tax Return, or Form 100W, California
assignment of credit by an eligible assignee to
• Limitations on the number of years the
Corporation Franchise or Income Tax Return
an assignor. If the eligible assignee makes a
assigned credits may be carried forward.
– Water’s-Edge Filers.
payment for receiving the assignment of credit,
In addition to the requirement to separately list
When filing a combined report and more than
the payment is not a deductible expense for the
credits generated in different taxable years, the
one credit is being assigned, file a separate
assignee nor income to the assignor.
assignor must separately list credits which are
form FTB 3544 for each credit and attach it
The assignor who assigns a credit shall
subject to separate and distinct limitations and
to Form 100 or Form 100W. For example,
complete all of the information requested on
disclose each of those separate and distinct
Corporations A, B, and C are members of
form FTB 3544. Attach additional form(s)
limitations in a statement to be attached to
a unitary group filing a combined report. If
FTB 3544, if necessary. Schedules or substitute
form FTB 3544.
Corporation A is assigning Research and
forms, other than Franchise Tax Board (FTB)
For example, the amount of EZ credit allowable
Development (R&D) credit and Enterprise
approved computer-generated substitute
for use is limited to the tax on income
Zone (EZ) credit to Corporations B and C,
versions of form FTB 3544, will not be accepted.
attributable to that enterprise zone. For zone
Corporation A shall complete and attach two
Also, the assignor shall maintain the
credits assigned, the assignee must have a tax
forms FTB 3544 to the original tax return. One
information necessary to substantiate any
liability on the income attributable to the same
form is for the R&D credit and one form is for
credit assigned and to verify the assignment
zone that the original credit was generated.
the EZ credit.
and subsequent use of the credit assigned.
If the original credit was generated in the
B Definitions
Lack of substantiation may result in the
Fresno enterprise zone of the assignor, the
disallowance of the assignment. The assignor
assignee must have a tax liability on the income
Eligible credit. Eligible credit means any
and the eligible assignee shall each be liable
attributable to the Fresno enterprise zone.
credit generated by the taxpayer in a taxable
for the full amount of any tax, addition to tax,
Also, when a corporation has an “ownership
year beginning on or after July 1, 2008, or any
or penalty that results from any disallowance
change” as defined in IRC Section 382, tax
credit generated in any taxable year beginning
of any eligible credit assigned under R&TC
credits may be subject to limitations imposed
before July 1, 2008, that is eligible to be
Section 23663, and the FTB may collect such
under IRC Section 383. In such situations, the
carried forward to the taxpayer’s first taxable
amount in full from either the assignor or the
annual use of credits is limited to an amount
year beginning on or after July 1, 2008.
eligible assignee.
determined under IRC Section 383.
FTB 3544 Instructions 2012 Page 1
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