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Category: California

California Credits

 

 

Child Care Credit: For taxable years beginning on or after January 1, 2011, the child and dependent care expenses credit is nonrefundable. You may qualify to claim this credit in 2017 for child and dependent care expenses if you (or your spouse/RDP) paid someone in California to care for your child or other qualifying person while you worked or looked for employment.

 

*Note: If you are a nonresident, you must have earned wages from working in California or earned self-employment income from California business activities. 

 

 

California Nonrefundable Renter's Credit: If you were a resident of California and paid rent on property in California, which was your principal residence, you may qualify for a credit that you can use to reduce your tax. You qualify for the Nonrefundable Renter's Credit if you meet all of the following:

 

* You were a resident of California in 2017 (military personnel, if you are not a legal resident of California, you do not qualify for this credit. However, your spouse/RDP may claim this credit if he or she was a resident during 2017, and is otherwise qualified.)

 

* Your California adjusted gross income is $40,078 or less if your filing status is single or married/registered domestic partner filing a separate return; or $80,156 or less if you are married/registered domestic partner filing jointly. head of household, or qualified widow(er).

 

* You paid rent for at least half of 2017 on property (including a mobile home that you owned on rented land) in California that was your principal residence.

 

* You cannot be claimed as a dependent by a parent, foster parent, legal guardian, or any other person in 2017. 

 

* For more than half the tax year, you did not live in the home of the person who can claim you as a dependent in 2017. 

 

* The property you rented was not exempt from California property tax in the tax year.

 

* If you are married, neither you nor your spouse/registered domestic partner was granted a homeowner's property tax exemption during 2017.

 

*Note: You may still qualify for the credit, even though your spouse/registered domestic partner claimed a homeowner's exemption, as long as each of you maintained a separate residence for the entire year in 2017.

 

If you meet the requirements above, the credit is:

 

* Single, $60

 

* Head of Household or widow(er), $120

 

* Married/registered domestic partner filing separately, $60 each

 

* Married/registered domestic partner filing jointly, $120

 

 

Credit for Child Adoption Costs: For the year in which an adoption decree or an order of adoption is entered (e.g., adoption is final) you are allowed to claim a credit for 50% of the cost of adopting a child who was both:

 

* A citizen or legal resident of the United States.

 

* In the custody of a California public agency or a California political subdivision.

 

This credit is limited to $2,500 for 2017 per minor child. The excess may be carried to future years until the credit is used.

*Note: This credit does not apply when a child is adopted from another country or another state, or was not in the custody of a California public agency or a California political subdivision. Also, any deduction for the expenses used to claim this credit must be reduced by the amount of the child adoption costs credit claimed.

 

 

Community Development Financial Institution Investment: Code 209: This credit has expired.  For more information click here. However, the carryover may still be claimed. You may claim this credit only if you have an unused carryover available from a prior year.  

Limitation: The credit may be carried forward for up to four years from the year in which the credit was incurred, or until exhausted, whichever occurs first

 

Credit for Dependent Parent: Code 173:  You may NOT claim this credit if you used the single, head of household, qualifying widow(er), or married/RDP filing jointly filing status. Claim this credit only if all of the following apply:

 

* You were married/or an RDP at the end of 2017 and you used the married/RDP filing separately filing status.

 

* Your spouse/RDP (Registered Domestic Partner) was not a member of your household during the last six months of the year.

 

* You furnished over one-half the household expenses for your dependent mother’s or father’s home, whether or not she or he lived in your home.

 

If you qualify for the Credit for Joint Custody Head of Household and the Credit for Dependent Parent, claim only one credit. Select the credit that allows the maximum benefit.

 

 

Enterprise Zone Hiring Credit:  Code 176:  FTB 3805Z Instructions.  Hiring credit for an enterprise zone.  All Enterprise Zones repealed as of January 1, 2014.  The portion of any credit remaining for carryover to taxable years beginning on or after January 1, 2014, shall be carried over only to the succeeding 10 taxable years if necessary, or until the credit is exhausted, whichever occurs first. Any hiring credits generated in the current taxable year for employees hired on or before December 31, 2013, and unusable in the current taxable year, may be carried over to the succeeding 10 taxable years.

 

Enterprise Zone Sales or Use Tax *: Credit has expired, however, the carryover may still be claimed. You may claim this credit only if you have an unused carryover available from a prior year, shall be carried over only to the succeeding 10 taxable years if necessary, or until the credit is exhausted, whichever occurs first.

 

 

Farmworker Housing*:  Code: 207:   See FTB 3540 Instructions.  This credit has expired. You may claim this credit carryover for the eligible costs to construct or rehabilitate qualified farmworker housing under former R&TC Sections 17053.14 and 23608.2 only if you have an unused carryover from taxable years 1997 through 2008.

 

 

Credit for Joint Custody Head of Household:  Code 170:  Form 540 Instructions 30% credit percentage or $451 (whichever is less). You may NOT claim this credit if you used the married/RDP filing jointly, head of household, or qualifying widow(er) filing status.

 

Claim the credit if:

 

* unmarried and not an RDP (Registered Domestic Partner) at the end of 2017 (or if married/or an RDP, you lived apart from your spouse/RDP for all of 2017 and you used the married/RDP filing separately filing status);

 

AND

 

* if you furnished more than one-half the household expenses for your home that also served as the main home of your child, step-child, or grandchild for at least 146 days but not more than 219 days of the taxable year.

 

If the child is married or an RDP, you must be entitled to claim a dependent exemption credit for the child.

 

If you qualify for the Credit for Joint Custody Head of Household and the Credit for Dependent Parent, claim only one credit. Select the credit that allows the maximum benefit.

 

 

Local Agency Military Base Recovery Area (LAMBRA Hiring Credit)*  Code 198 : For more information FTB 3807 Instructions Business incentives for LAMBRAs.  For taxable years beginning on or after January 1, 2014, taxpayers cannot generate any LAMBRA hiring credit. However, qualified employees who are hired on or before December 31, 2013, by the qualified taxpayer within the LAMBRA and paid or incurred qualified wages during the 60-month period immediately following the hire date shall continue to qualify for the credit under this section for taxable years beginning on or after January 1, 2014. 

LAMBRA Sales and Use Tax: The portion of any LAMBRA sales or use tax credit or hiring credit remaining for carryover to taxable years beginning on or after January 1, 2014, shall be carried over only to the succeeding 10 taxable years if necessary, or until the credit is exhausted, whichever occurs first. 

 

 

Manufacturing Enhancement Area (MEA) Hiring*: Code 211:  FTB 3808 Percentage of qualified wages paid to qualified disadvantaged individual. For more information click here

 

Prison Inmate Labor*:  Code 162:  FTB 3507-10% of wages paid to prison inmates who are employed under a joint venture with the California Department of Corrections.

 

 

Credit for Senior Head of Household:  Code 163: 2% of taxable income or $1,380 or (whichever is less). You may claim this credit if you:

 

1. Were 65 years of age or older on December 31, 2017.*

 

2. Qualified as a head of household in 2015 or 2016 by providing a household for a qualifying individual who died during 2015 or 2016.

 

3. Did not have AGI over $73,226 for 2017.

 

* If your 65th birthday is on January 1, 2018, you are considered to be age 65 on December 31, 2017.

 

 

Targeted Tax Area (TTA) Hiring Credit: Code 210: Business incentives for TTA businesses  FTB 3809 Instructions   Taxpayers can no longer generate/incur TTA hiring credits for employees hired on or after January 1, 2013. However, qualified taxpayers can generate/incur TTA hiring credits for qualified employees hired prior to the TTA expiration date for wages paid or incurred within the 60-month period of the TTA hiring credit.

Targeted Tax Area (TTA) Sales or Use Tax :* Code 210    FTB 3809 Instructions The sales and use portion has also expired.  The sales and use portion has a credit credit carryover   TaxSlayerfor 10 years or until credit is exhausted which ever comes first.

 

California Competes Tax Credit:  Code 233:– See Instructions for Form FTB 3531-For taxable years beginning on and after January 1, 2014, and before January 1, 2025, the California Competes Tax Credit is available to businesses that want to come to California or stay and grow in California.   Any credits not used in the taxable year may be carried forward up to six years.

 

New Employment Credit:  Code 234:  Instructions for Form FTB 3554 - For taxable years beginning on or after January 1, 2014, and before January 1, 2021, the New Employment Credit (NEC) is available to a qualified taxpayer that hires a qualified full-time employee on or after January 1, 2014, and pays or incurs qualified wages attributable to work performed by the qualified full‑time employee in a designated census tract or economic development area, and receives a tentative credit reservation for that qualified full‑time employee.

 

College Access Tax Credit: Code 235:     Form 3592

For taxable years beginning on and after January 1, 2017, and before January 1, 2023, the College Access Tax Credit (CATC) is available to entities awarded the credit from the California Educational Facilities Authority (CEFA). The credit is 50% of the amount contributed by the taxpayer for the taxable year to the College Access Tax Credit Fund.

 

 

**Repealed Credits:

 

The expiration dates for the credits listed below have passed. However, these credits had carryover provisions. You may claim these credits only if there is a carryover available from prior years. If you are not required to complete Schedule P (540), Alternative Minimum Tax and Credit Limitations – Residents, get Form FTB 3540 Instructions, Credit Carryover Summary, to figure your credit carryover to future years.  For LAMBRA or TTA credit carryovers, get Form FTB 3807 Instructions or FTB 3809 Instructions

 

 

These credits include:

 

Agricultural Products;

Commercial Solar Electric System;

Commercial Solar Energy: Code;

Community Development Financial Institutions Investment;

Donated Fresh Fruits or Vegetables;

Employer Childcare Contribution;

Employee Ridesharing;

Employer Ridesharing: Large employer;  Small employer; Transit Passes

Employer Childcare Program;

Energy Conservation;

Enterprise Zone Sales or Use Tax; 

Farmworker Housing; 

Local Agency Military Base Recovery Area Sales or Use Tax;

Low-Emission Vehicles Manufacturers;

New Jobs;

Orphan Drug; 

Political Contributions;

Recycling Equipment;

Residential Rental & Farm Sales;

Rice Straw; 

Ridesharing;

Salmon & Steelhead Trout Habitat Restoration;

Solar Energy;

Solar Pump;

Targeted Tax Area Sales or Use Tax;

Water Conservation; 

Young Infant



*Credits signified with an (*) cannot be e-filed and may need an accompanying form.

 

For further instructions on several of the categories listed above click here.