2023 Personal Income Tax Booklet | California Forms & Instructions 540 (2024)

Important Dates

$$$ for You

• Federal Earned Income Credit (EIC) – Go to the Internal Revenue Service (IRS) website at irs.gov/taxtopics and choose topic 601, get the federal income tax booklet, or go to irs.gov and search for eitc assistant.
• California Earned Income Tax Credit (EITC) – EITC reduces your California tax obligation, or allows a refund if no California tax is due. You may qualify if you have wage income earned in California and/or net earnings from self‑employment of less than $30,951. You do not need a child to qualify. For more information, go to ftb.ca.gov and search for eitc or get form FTB 3514, California Earned Income Tax Credit.
• Young Child Tax Credit (YCTC) – YCTC reduces your California tax obligation, or allows a refund if no California tax is due. You may qualify for the credit if you qualified for the California EITC or you would otherwise have been allowed the California EITC but you have earned income of zero dollars or less, and you have at least one qualifying child who is younger than six years old as of the last day of the taxable year. For more information, see the instructions for Form 540, California Resident Income Tax Return, line 76, and get form FTB 3514, or go to ftb.ca.gov and search for yctc.
• Foster Youth Tax Credit (FYTC) – FYTC reduces your California tax obligation, or allows a refund if no California tax is due. You may qualify for the credit if you qualified for the California EITC, age 18 to 25, were in foster care while 13 years of age or older and placed through the California foster care system. For more information, see the instructions for Form 540, line 77, and get form FTB 3514, or go to ftb.ca.gov and search for fytc.
• Refund of Excess State Disability Insurance (SDI) – If you worked for at least two employers during 2023 who together paid you more than $153,164 in wages, you may qualify for a refund of excess SDI. See instructions for Form 540, line 74, Excess California SDI (or VPDI) Withheld.

Common Errors and How to Prevent Them

Help us process your tax return quickly and accurately. When we find an error, it requires us to stop to verify the information on the tax return, which slows processing. The most common errors consist of:

• Claiming the wrong amount of estimated tax payments.
• Claiming the wrong amount of standard deduction or itemized deductions.
• Claiming a dependent already claimed on another return.
• The amount of refund or payments made on an original return does not match our records when amending your tax return.
• Claiming the wrong amount of withholding by incorrectly totaling or transferring the amounts from your federal Form W-2, Wage and Tax Statement.
• Claiming the wrong amount of real estate withholding.
• Claiming the wrong amount of SDI.
• Claiming the wrong amount of exemption credits.

Claiming estimated tax payments:

• Verify the amount of estimated tax payments claimed on your tax return matches what you sent to the Franchise Tax Board (FTB) for that year. Go to ftb.ca.gov and login or register for MyFTB to view your total estimated tax payments before you file your tax return.
• Verify the overpayment amount from your 2022 tax return you requested to be applied to your 2023 estimated tax.

Claiming state disability insurance:

• Verify the amount of SDI used to figure the amount of excess SDI claimed on Form 540, line 74, matches amounts from your W-2’s.

Claiming standard deduction or itemized deductions:

• See Form 540, line 18 instructions and worksheets for the amount of standard deduction or itemized deductions you can claim.

Claiming withholding amounts:

• Go to ftb.ca.gov and login or register for MyFTB to verify withheld amount or see instructions for Form 540, line 71. Confirm only California income tax withheld is claimed.
• Verify real estate or other withholding amount from Form 592-B, Resident and Nonresident Withholding Tax Statement, and Form 593, Real Estate Withholding Statement. See instructions for Form 540, line 73.

Claiming refund or payments made on an original return when amending your tax return:

• Go to ftb.ca.gov and login or register for MyFTB to check tax return records for refund or payments made.
• Verify the amount from your original return Form 540, line 115 and include any adjustment by the FTB.

Use e-file:

• By using e-file, you can eliminate many common errors. Go to ftb.ca.gov and search for efile options.

Do I Have to File?

Steps to Determine Filing Requirement

Step 1: Is your gross income (all income received from all sources in the form of money, goods, property, and services that are not exempt from tax) more than the amount shown in the California Gross Income chart below for your filing status, age, and number of dependents? If yes, you have a filing requirement. If no, go to Step 2.

Step 2: Is your adjusted gross income (federal adjusted gross income from all sources reduced or increased by all California income adjustments) more than the amount shown in the California Adjusted Gross Income chart below for your filing status, age, and number of dependents? If yes, you have a filing requirement. If no, go to Step 3.

Step 3: If your income is less than the amounts on the chart, you may still have a filing requirement. See “Requirements for Children with Investment Income” and “Other Situations When You Must File.” Do those instructions apply to you? If yes, you have a filing requirement. If no, go to Step 4.

Step 4: Are you married/RDP filing separately with separate property income? If no, you do not have a filing requirement. If yes, prepare a tax return. If you owe tax, you have a filing requirement.

Requirements for Children with Investment Income

California law conforms to federal law which allows parents’ election to report a child’s interest and dividend income from children under age 19 or a student under age 24 on the parent’s tax return. For each child under age 19 or student under age 24 who received more than $2,500 of investment income in 2023, complete Form 540 and form FTB 3800, Tax Computation for Certain Children with Unearned Income, to figure the tax on a separate Form 540 for your child.

If you qualify, you may elect to report your child’s income of more than $1,250 but less than $12,500 on your tax return by completing form FTB 3803, Parents’ Election to Report Child’s Interest and Dividends. To make this election, your child’s income must be only from interest and/or dividends. To get forms FTB 3800 or FTB 3803, see “Order Forms and Publications” or go to ftb.ca.gov/forms.

Other Situations When You Must File

If you have a tax liability for 2023 or owe any of the following taxes for 2023, you must file Form 540.

• Tax on a lump-sum distribution.
• Tax on a qualified retirement plan including an Individual Retirement Arrangement (IRA) or an Archer Medical Savings Account (MSA).
• Tax for children under age 19 or student under age 24 who have investment income greater than $2,500 (see paragraph above).
• Alternative minimum tax.
• Recapture taxes.
• Deferred tax on certain installment obligations.
• Tax on an accumulation distribution from a trust.

Filing Status

Use the same filing status for California that you used for your federal income tax return, unless you are an RDP. If you are an RDP and file single for federal, you must file married/RDP filing jointly or married/RDP filing separately for California. If you are an RDP and file head of household for federal purposes, you may file head of household for California purposes only if you meet the requirements to be considered unmarried or considered not in a domestic partnership.

Exception: If you file a joint tax return for federal purposes, you may file separately for California if either spouse was either of the following:

• An active member of the United States armed forces or any auxiliary military branch during 2023.
• A nonresident for the entire year and had no income from California sources during 2023.

  Community Property States: If the spouse earning the California source income is domiciled in a community property state, community income will be split equally between the spouses. Both spouses will have California source income and they will not qualify for the nonresident spouse exception.

If you had no federal filing requirement, use the same filing status for California that you would have used to file a federal income tax return.

If you filed a joint tax return and either you or your spouse/RDP was a nonresident for 2023, file Form 540NR, California Nonresident or Part-Year Resident Income Tax Return.

Single

You are single if any of the following was true on December 31, 2023:

• You were not married or an RDP.
• You were divorced under a final decree of divorce, legally separated under a final decree of legal separation, or terminated your registered domestic partnership.
• You were widowed before January 1, 2023, and did not remarry or enter into another registered domestic partnership in 2023.

Married/RDP Filing Jointly

You may file married/RDP filing jointly if any of the following is true:

• You were married or an RDP as of December 31, 2023, even if you did not live with your spouse/RDP at the end of 2023.
• Your spouse/RDP died in 2023 and you did not remarry or enter into another registered domestic partnership in 2023.
• Your spouse/RDP died in 2024 before you filed a 2023 tax return.

A married couple or RDPs may file a joint return even if only one had income or if they did not live together all year. However, both must sign the tax return.

Married/RDP Filing Separately

• Community property rules apply to the division of income if you use the married/RDP filing separately filing status. For more information, get FTB Pub. 1031, Guidelines for Determining Resident Status, FTB Pub. 737, Tax Information for Registered Domestic Partners, or FTB Pub. 1032, Tax Information for Military Personnel. See “Order Forms and Publications” or go to ftb.ca.gov/forms.
• You cannot claim a personal exemption credit for your spouse/RDP even if your spouse/RDP had no income, is not filing a tax return, and is not claimed as a dependent on another person’s tax return.
• You may be able to file as head of household if your child lived with you and you lived apart from your spouse/RDP during the entire last six months of 2023.

Head of Household

For the specific requirements that must be met to qualify for head of household (HOH) filing status, get FTB Pub. 1540, Tax Information for Head of Household Filing Status. In general, HOH filing status is for unmarried individuals and certain married individuals or RDPs living apart who provide a home for a specified relative. You may be entitled to use HOH filing status if all of the following apply:

• You were unmarried and not in a registered domestic partnership, or you met the requirements to be considered unmarried or considered not in a registered domestic partnership on December 31, 2023.
• You paid more than one-half the cost of keeping up your home for the year in 2023.
• For more than half the year, your home was the main home for you and one of the specified relatives who by law can qualify you for HOH filing status.
• You were not a nonresident alien at any time during the year.

For a child to qualify as your foster child for HOH purposes, the child must either be placed with you by an authorized placement agency or by order of a court.

California requires taxpayers who use HOH filing status to file form FTB 3532, Head of Household Filing Status Schedule, to report how the HOH filing status was determined.

Beginning in tax year 2018, if you do not attach a completed form FTB 3532 to your tax return, we will deny your HOH filing status. For more information about the HOH filing requirements, go to ftb.ca.gov and search for hoh. To get form FTB 3532, see “Order Forms and Publications” or go to ftb.ca.gov/forms.

Qualifying Surviving Spouse/RDP

Check the box on Form 540, line 5 and use the joint return tax rates for 2023 if all five of the following apply:

• Your spouse/RDP died in 2021 or 2022 and you did not remarry or enter into another registered domestic partnership in 2023.
• You have a child, stepchild, or adopted child (not a foster child) whom you can claim as a dependent or could claim as a dependent except that, for 2023:
  • The child had gross income of $4,700 or more;
  • The child filed a joint return; or
  • You could be claimed as a dependent on someone else’s return.
• If the child is not claimed as your dependent, enter the child's name in the entry space under the "Qualifying surviving spouse/RDP" filing status.
• This child lived in your home for all of 2023. Temporary absences, such as for vacation or school, count as time lived in the home.
• You paid over half the cost of keeping up your home for this child.
• You could have filed a joint tax return with your spouse/RDP the year he or she died, even if you actually did not do so.

What’s New and Other Important Information for 2023

Differences between California and Federal Law

In general, for taxable years beginning on or after January 1, 2015, California law conforms to the Internal Revenue Code (IRC) as of January 1, 2015. However, there are continuing differences between California and federal law. When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level. For more information, go to ftb.ca.gov and search for conformity. Additional information can be found in FTB Pub. 1001, Supplemental Guidelines to California Adjustments, the instructions for California Schedule CA (540), California Adjustments – Residents, and the Business Entity tax booklets.

The instructions provided with California tax forms are a summary of California tax law and are only intended to aid taxpayers in preparing their state income tax returns. We include information that is most useful to the greatest number of taxpayers in the limited space available. It is not possible to include all requirements of the California Revenue and Taxation Code (R&TC) in the instructions. Taxpayers should not consider the instructions as authoritative law.

Conformity – For updates regarding federal acts, go to ftb.ca.gov and search for conformity.

2023 Tax Law Changes/What’s New

Personal Income Tax Products – The 540 Personal Income Tax Booklet has been reformatted to include only Form 540 and Schedule CA (540), related instructions, and tax tables. In addition, a new FTB 3514, California Earned Income Tax Credit Booklet, has been created. The new FTB 3514 booklet contains form FTB 3514, instructions, and the EITC tables. To get FTB 3514 booklet and other FTB forms and publications, see "Order Forms and Publications" or go to ftb.ca.gov/forms.

Use Tax – For taxable years beginning on or after January 1, 2023, and before January 1, 2029, you may not report business purchases subject to use tax on your income tax return if you make more than $10,000 in purchases subject to use tax per calendar year and have not paid use tax on those purchases to a retailer engaged in business in California or to a retailer authorized by the California Department of Tax and Fee Administration to collect the tax. For other use tax requirements, see specific line instructions for Form 540, line 91 and R&TC Section 6225.

Low-Income Housing Credit – For taxable years beginning on or after January 1, 2023, California law allows a taxpayer to claim the Low-Income Housing Credit in the taxable year the building is placed in service and the federal credit period commences, based upon taxpayer certification, even if the California Tax Credit Allocation Committee (CTCAC) has not yet issued a certificate. If the CTCAC issues a certificate with a credit amount that is inconsistent with the taxpayer's certification, upon which a credit has been claimed, the taxpayer is required to amend any previously filed tax returns to reflect the credit amount certified by the CTCAC. For more information, get form FTB 3521, Low-Income Housing Credit, and see R&TC Section 17058.

Federal Veterans Auto and Education Improvement Act (VAEIA) of 2022 – The VAEIA was enacted on January 5, 2023, and made amendments to the federal Servicemembers Civil Relief Act (SCRA). California conforms to the following VAEIA provisions:

• A spouse of a servicemember shall neither lose nor acquire a residence or domicile for purposes of taxation with respect to the person, personal property, or income of the spouse by reason of being absent or present in any tax jurisdiction of the United States solely to be with the servicemember in compliance with the servicemember's military orders.
• For any taxable year of the marriage, a servicemember and the spouse of such servicemember may elect to use for purposes of taxation, regardless of the date on which the marriage of the servicemember and the spouse occurred, any of the following:
  • The residence or domicile of the servicemember.
  • The residence or domicile of the spouse.
  • The permanent duty station of the servicemember.

For more information, get FTB Pub. 1032, Tax Information for Military Personnel.

Federal Consolidated Appropriations Act (CAA), 2023 – The CAA, 2023, was enacted on December 29, 2022, and it includes the federal Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act of 2022. In general, the R&TC conforms to the changes to the retirement provisions under the SECURE 2.0 Act. California law does not conform to the federal changes that disallow a deduction for charitable conservation easem*nt contributions when the amount of the contribution exceeds 2.5 times the sum of each partner's relevant basis in the partnership. For more information on the allowance of the deduction for charitable conservation easem*nt contributions for California income tax purposes, get FTB Notice 2023-02.

For more general information, refer to the federal act, the California R&TC, and Schedule CA (540) instructions.

California Microbusiness COVID-19 Relief Grant – The gross income exclusion for the California Microbusiness COVID-19 Relief Grant is extended until taxable years beginning before January 1, 2025. For more information, see Schedule CA (540) instructions and R&TC Section 17158.1.

Governor Declared Disaster Extension – The sunset date for the deduction for disaster losses sustained in Governor declared disaster areas is extended until taxable years beginning before January 1, 2029. For more information, get form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations – Individuals, Estates, and Trusts, and see R&TC Section 17207.14.

New Employment Credit Expansion – For taxable years beginning on or after January 1, 2023, and before January 1, 2026, the New Employment Credit is expanded for qualified taxpayers engaged in semiconductor manufacturing or semiconductor research and development, lithium production, manufacturing of lithium batteries, or electric airplane manufacturing. For more information, get FTB 3554, New Employment Credit Booklet, and see R&TC Section 17053.73.

Program 3.0 California Motion Picture and Television Production Credit – For taxable years beginning on or after January 1, 2020, California law allows the Program 3.0 California Motion Picture and Television Production Credit to reduce net tax below tentative minimum tax (TMT). For more information, get form FTB 3541, California Motion Picture and Television Production Credit, and see R&TC Section 17039.

Soundstage Filming Tax Credit – For taxable years beginning on or after January 1, 2022, California law allows the Soundstage Filming Tax Credit to reduce net tax below the TMT. For more information, get form FTB 3541 and see R&TC Section 17039.

California Hope, Opportunity, Perseverance, and Empowerment (HOPE) for Children Trust Account Program – The California HOPE for Children Trust Account Act created the California HOPE for Children Trust Account Program for the purpose of providing an eligible child with a HOPE trust account. For taxable years beginning on or after January 1, 2023, California law allows an exclusion from gross income for any funds deposited, any investment returns accrued, and any accrued interest in a HOPE trust account and for any funds from a HOPE trust account that is withdrawn or transferred by an eligible youth. For purposes of eligibility for the California Earned Income Tax Credit and Young Child Tax Credit, any funds deposited, any investment returns accrued, and any accrued interest in a HOPE trust account and any funds from a HOPE trust account that is withdrawn or transferred by an eligible youth are not considered earned income. For more information, see Schedule CA (540) instructions and R&TC Section 17141.5.

Interagency Council on Homelessness Payment Exclusion – For taxable years beginning on or after January 1, 2023, California law allows an exclusion from gross income for payments received pursuant to the California Welfare and Institutions Code Section 8257 by members of the Interagency Council on Homelessness, its advisory committee, or its working groups who are or have been homeless. For more information, see Schedule CA (540) instructions and R&TC Section 17131.13.

Kincade Wildfire Exclusion – For taxable years beginning on or after January 1, 2020, and before January 1, 2028, California law allows a qualified taxpayer an exclusion from gross income for any qualified amount received in a settlement from Pacific Gas and Electric (PG&E) Company or its subsidiary relating to the 2019 Kincade Fire. If a qualified taxpayer included income for a qualified amount received from this settlement in a prior taxable year, the taxpayer can file an amended tax return for that year within the normal statute of limitations. For more information, see Schedule CA (540) instructions and R&TC Section 17139.2.

Zogg Wildfire Exclusion – For taxable years beginning on or after January 1, 2020, and before January 1, 2028, California law allows a qualified taxpayer an exclusion from gross income for any qualified amount received in a settlement from PG&E Company or its subsidiary relating to the 2020 Zogg Fire. If a qualified taxpayer included income for a qualified amount received from this settlement in a prior taxable year, the taxpayer can file an amended tax return for that year within the normal statute of limitations. For more information, see Schedule CA (540) instructions and R&TC Section 17139.3.

High-Road Cannabis Tax Credit – For taxable years beginning on or after January 1, 2023, and before January 1, 2028, the High-Road Cannabis Tax Credit (HRCTC) will be available to licensed commercial cannabis businesses that meet the qualifications. The credit is allowed to a qualified taxpayer in an amount equal to 25% of qualified expenditures in the taxable year. The credit amount cannot exceed $250,000. Unused credit may be carried forward up to eight years. All types of entities, except for exempt organizations, are eligible to claim this credit.

A qualified taxpayer must request a tentative credit reservation from the FTB during the month of July for each taxable year or within 30 days of the start of their taxable year if the qualified taxpayer's taxable year begins from August 1 through December 31.

For more information, get form FTB 3820, High-Road Cannabis Tax Credit, see R&TC Section 17053.64, or go to ftb.ca.gov and search for hrctc.

Cannabis Equity Tax Credit – For taxable years beginning on or after January 1, 2023, and before January 1, 2028, a Cannabis Equity Tax Credit (CETC) is available to equity licensees that have received approval, including approval contingent upon the availability of funds, for the fee waiver and deferral program administered by the Department of Cannabis Control (DCC). The allowable credit is $10,000 per taxable year for each qualified taxpayer. Unused credit may be carried forward up to eight years. All types of entities, except for exempt organizations, are eligible to claim this credit. For more information, get form FTB 3821, Cannabis Equity Tax Credit, see R&TC Section 17053.82, or go to ftb.ca.gov and search for cetc.

No-cost or Low-cost Health Care Coverage Information – For taxable years beginning on or after January 1, 2023, we added a new health care coverage information question on the tax return. If you are interested in no-cost or low-cost health care coverage information, check the "Yes" box on Form 540, Side 5. See Health Care Coverage Information in the instructions.

Discharge of Student Fees – For taxable years beginning on or after January 1, 2022, and before January 1, 2027, California law allows an exclusion from gross income for any amount of unpaid fees due or owed by a student to a community college that was discharged pursuant to California Education Code Section 32527. For more information, see Schedule CA (540) instructions and R&TC Section 17131.21.

Guaranteed Income Pilot Program Payment Exclusion – Beginning on June 30, 2022, and before July 1, 2026, California law allows an exclusion from gross income for any payments received by an individual from a guaranteed income pilot program or project that receives a grant pursuant to California Welfare and Institution Code Section 18997. For more information, see Schedule CA (540) instructions and R&TC Section 17131.12.

Reporting Requirements – Taxpayers may need to file form FTB 4197, Information on Tax Expenditure Items, with the tax return to report tax expenditure items as part of the FTB’s annual reporting requirements under R&TC Section 41. To determine if you have an R&TC Section 41 reporting requirement, see the R&TC Section 41 Reporting Requirements section or get form FTB 4197.

R&TC Section 41 Reporting Requirements

Taxpayers should file form FTB 4197 with the tax return to report tax expenditure items as part of the FTB's annual reporting requirements under R&TC Section 41. "Tax expenditure" means a credit, deduction, exclusion, exemption, or any other tax benefit provided for by the state. The FTB uses information from form FTB 4197 for reports required by the California Legislature. Taxpayers that have a reporting requirement for any of the following should file form FTB 4197:

• For taxable years beginning on or after January 1, 2020, and before January 1, 2028, qualified taxpayers who benefited from the exclusion from gross income for any qualified amount received in a settlement from PG&E Company or its subsidiary relating to the 2019 Kincade Fire.
• For taxable years beginning on or after January 1, 2020, and before January 1, 2028, qualified taxpayers who benefited from the exclusion from gross income for any qualified amount received in a settlement from PG&E Company or its subsidiary relating to the 2020 Zogg Fire.
• For taxable years beginning on or after January 1, 2020, and before January 1, 2028, taxpayers who benefited from the exclusion from gross income for certain emergency financial aid grants received by a postsecondary education student.
• For taxable years beginning on or after January 1, 2021, and before January 1, 2026, taxpayers who benefited from the exclusion from gross income for the amount of student loans discharged under the ARPA for the following: loans provided expressly for post-secondary educational expenses if the loans were made, insured, or guaranteed by a federal, state or local government entity, or an eligible educational institution; private education loans; loans made by certain educational institutions/organizations by tax-exempt organizations to refinance a loan.
• For taxable years beginning before January 1, 2027, qualified taxpayers who benefited from the exclusion from gross income for any amount received in a settlement from Southern California Edison for claims relating to the 2017 Thomas Fire or the 2018 Woolsey Fire.
• For taxable years beginning on January 1, 2022, and before January 1, 2027, taxpayers who benefited from the exclusion of gross income for any amount received as a rebate, voucher, or other financial incentive issued by a public water system, as defined, local government, or state agency for participation in a turf replacement water conservation program.
• For taxable years beginning on or after January 1, 2021, taxpayers who benefited from the exclusion from gross income for the Paycheck Protection Program (PPP) loans forgiveness, other loan forgiveness, the Economic Injury Disaster Loan (EIDL) advance grant, restaurant revitalization grant, or shuttered venue operator grant, and related eligible expense deductions.
• Beginning in taxable year 2020, a taxpayer operating a commercial cannabis activity that is licensed under California Medicinal and Adult-Use Cannabis Regulation and Safety Act (CA MAUCRSA).

For more information, get form FTB 4197.

Other Important Information

Timeliness Penalty Abatement – For taxable years beginning on or after January 1, 2022, an individual taxpayer may elect to request a one-time abatement of a failure-to-file or failure-to-pay timeliness penalty either orally or in writing, if certain conditions are met. For more information, see specific line instructions for Form 540, Interest and Penalties section, and R&TC Section 19132.5.

Young Child Tax Credit Expansion – For taxable years beginning on or after January 1, 2022, California expanded the YCTC eligibility to include an eligible individual with a qualifying child who would otherwise have been allowed the California EITC but the individual has earned income of zero dollars or less, does not have net losses in excess of $33,497 in the current taxable year, and does not have wages, salaries, tips, and other employee compensation in excess of $33,497 in the current taxable year. For more information, get form FTB 3514, or go to ftb.ca.gov and search for yctc.

Foster Youth Tax Credit – For taxable years beginning on or after January 1, 2022, the refundable FYTC is available to an individual and/or spouse/RDP age 18 to 25, who is allowed the California EITC for the taxable year, was in foster care while 13 years of age or older and placed through the California foster care system. For the current taxable year, the maximum amount of credit allowable for each eligible taxpayer is $1,117 and the credit amount phases out as earned income exceeds the threshold amount of $25,775 and completely phases out at $30,932. For more information, see specific line instructions for Form 540, line 77, and get form FTB 3514, see R&TC Section 17052.2, or go to ftb.ca.gov and search for fytc.

Voter Registration Information – For taxable years beginning on or after January 1, 2022, we added a Voter Registration Information checkbox on the tax return. For more information, see specific line instructions for Form 540, Voter Information section.

Federal Acts – In general, the R&TC does not conform to the changes under the following federal acts. California taxpayers continue to follow the IRC as of the specified date of January 1, 2015, with modifications. For specific adjustments due to the following acts, see the Schedule CA (540) instructions.

• Inflation Reduction Act of 2022 (enacted on August 16, 2022)
• American Rescue Plan Act (ARPA) of 2021 (enacted on March 11, 2021)
• Consolidated Appropriations Act (CAA), 2021 (enacted on December 27, 2020)
• Coronavirus Aid, Relief, and Economic Security (CARES) Act (enacted on March 27, 2020)
• Setting Every Community Up for Retirement Enhancement (SECURE) Act (enacted on December 20, 2019)

Gross Income Exclusion for Bruce’s Beach – Effective September 30, 2021, California law allows an exclusion from gross income for the first time sale in the taxable year in which the land within Manhattan State Beach, known as “Peck’s Manhattan Beach Tract Block 5” and commonly referred to as “Bruce’s Beach” is sold, transferred, or encumbered. A recipient’s gross income does not include the following:

• Any sale, transfer, or encumbrance of Bruce’s Beach;
• Any gain, income, or proceeds received that is directly derived from the sale, transfer, or encumbrance of Bruce’s Beach.

For more information, get Schedule D (540), California Capital Gain or Loss Adjustment.

Moving Expense Deduction – For taxable years beginning on or after January 1, 2021, taxpayers should file California form FTB 3913, Moving Expense Deduction, to claim moving expense deductions. Attach the completed form FTB 3913 to Form 540. For more information, see Schedule CA (540) instructions and get form FTB 3913.

Elective Tax for Pass-Through Entities (PTE) and Credit for Owners – For taxable years beginning on or after January 1, 2021, and before January 1, 2026, California law allows an entity taxed as a partnership or an “S” corporation to annually elect to pay an elective tax at a rate of 9.3% based on its qualified net income. The election shall be made on an original, timely filed return and is irrevocable for the taxable year.

The law allows a credit against the personal income tax to a taxpayer, other than a partnership, that is a partner, shareholder, or member of a qualified entity that elects to pay the elective tax, in an amount equal to 9.3% of the partner’s, shareholder’s, or member’s pro rata share or distributive share and guaranteed payments of qualified net income subject to the election made by the qualified entity. Generally, a disregarded business entity and its partners or members cannot receive the credit, except for a disregarded single member limited liability company (SMLLC) that is owned by an individual, fiduciary, estate, or trust subject to personal income tax. For more information, go to ftb.ca.gov and search for pte elective tax and get the following PTE elective tax forms and instructions:

• Form FTB 3893, Pass-Through Entity Elective Tax Payment Voucher
• Form FTB 3804, Pass-Through Entity Elective Tax Calculation
• Form FTB 3804-CR, Pass-Through Entity Elective Tax Credit

Dependent Exemption Credit with No ID – For taxable years beginning on or after January 1, 2018, taxpayers claiming a dependent exemption credit for a dependent who is ineligible for a Social Security Number (SSN) and a federal Individual Taxpayer Identification Number (ITIN) may provide alternative information to the FTB to identify the dependent. For more information, get form FTB 3568, Alternative Identifying Information for the Dependent Exemption Credit.

Taxpayers may amend their tax return beginning with taxable year 2018 to claim the dependent exemption credit. If claiming a refund, taxpayers must amend their returns within the statute of limitations. For more information on how to amend your tax returns, see “Instructions for Filing a 2023 Amended Return.”

Worker Status: Employees and Independent Contractors – Some individuals may be classified as independent contractors for federal purposes and employees for California purposes, which may also cause changes in how their income and deductions are classified. Proposition 22 was operative as of December 16, 2020, and may affect a taxpayer’s worker classification. For more information, see Schedule CA (540) instructions.

Minimum Essential Coverage Individual Mandate – For taxable years beginning on or after January 1, 2020, California law requires residents and their dependents to obtain and maintain minimum essential coverage, also referred to as qualifying health care coverage. Individuals who fail to maintain qualifying health care coverage for any month during the taxable year will be subject to a penalty unless they qualify for an exemption. For more information, see specific line instructions for Form 540, line 92, or get the following health care forms, instructions, and publications:

• Form FTB 3853, Health Coverage Exemptions and Individual Shared Responsibility Penalty
• Form FTB 3895, California Health Insurance Marketplace Statement
• FTB Pub. 3895B, California Instructions for Filing Federal Forms 1094-B and 1095-B
• FTB Pub. 3895C, California Instructions for Filing Federal Forms 1094-C and 1095-C

Rental Real Estate Activities – For taxable years beginning on or after January 1, 2020, the dollar limitation for the offset for rental real estate activities shall not apply to the low income housing credit program. For more information, see R&TC Section 17561(d)(1). Get form FTB 3801-CR, Passive Activity Credit Limitations, for more information.

Small Business Accounting/Percentage of Completion Method – For taxable years beginning on or after January 1, 2019, California law generally conforms to the TCJA’s definition of small businesses as taxpayers whose average annual gross receipts over three years do not exceed $25 million. These small businesses are exempt from the requirement of using the Percentage of Completion Method of accounting for any construction contract if the contract is estimated to be completed within two years from the date the contract was entered into. A taxpayer may elect to apply the provision regarding accounting for long term contracts to contracts entered into on or after January 1, 2018.

Native American Earned Income Exemption – For taxable years beginning on or after January 1, 2018, federally recognized tribal members living in California Indian country who earn income from any federally recognized California Indian country are exempt from California taxation. This exemption applies only to earned income. Enrolled tribal members who receive per capita income must reside in their affiliated tribe’s Indian country to qualify for tax exempt status. Additional information can be found in the instructions for Schedule CA (540) and form FTB 3504, Enrolled Tribal Member Certification.

Schedule X, California Explanation of Amended Return Changes – Use Schedule X to determine any additional amount you owe or refund due to you, and to provide reason(s) for amending your previously filed income tax return. For additional information, see “Instructions for Filing a 2023 Amended Return.”

Improper Withholding on Severance Paid to Veterans – The federal Combat‑Injured Veterans Tax Fairness Act of 2016 gives veterans who retired from the Armed Forces for medical reasons additional time to claim a refund if they had taxes improperly withheld from their severance pay. If you filed an amended return with the IRS on this issue, you have two years to file your amended California return.

California Achieving a Better Life Experience (ABLE) Program – For taxable years beginning on or after January 1, 2016, the California Qualified ABLE Program was established and California law generally conforms to the federal income tax treatment of ABLE accounts. Additional information can be found in the instructions of form FTB 3805P, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.

Electronic Funds Withdrawal (EFW) – Make extension or estimated tax payments using tax preparation software. Check with your software provider to determine if they support EFW for extension or estimated tax payments.

Payments and Credits Applied to Use Tax – For taxable years beginning on or after January 1, 2015, if a taxpayer includes use tax on their personal income tax return, payments and credits will be applied to use tax first, then towards income tax, interest, and penalties. For more information, see specific line instructions for Form 540, line 91.

Mandatory Electronic Payments – You are required to remit all your payments electronically once you make an estimated tax or extension payment exceeding $20,000 or you file an original tax return with a total tax liability over $80,000. Once you meet this threshold, all subsequent payments regardless of amount, tax type, or taxable year must be remitted electronically. The first payment that would trigger the mandatory e-pay requirement does not have to be made electronically. Individuals that do not send the payment electronically will be subject to a 1% noncompliance penalty.

You can request a waiver from mandatory e-pay if one or more of the following is true:

• You have not made an estimated tax or extension payment in excess of $20,000 during the current or previous taxable year.
• Your total tax liability reported for the previous taxable year did not exceed $80,000.
• The amount you paid is not representative of your total tax liability.

For more information or to obtain the waiver form, go to ftb.ca.gov/e-pay. Electronic payments can be made using Web Pay on the FTB’s website, EFW as part of the e-file return, or your credit card.

Estimated Tax Payments – Taxpayers are required to pay 30% of the required annual payment for the 1st required installment, 40% of the required annual payment for the 2nd required installment, no installment is due for the 3rd required installment, and 30% of the required annual payment for the 4th required installment.

Taxpayers with a tax liability less than $500 ($250 for married/RDP filing separately) do not need to make estimated tax payments.

Backup Withholding – With certain limited exceptions, payers that are required to withhold and remit backup withholding to the IRS are also required to withhold and remit to the FTB on income sourced to California. If the payee has backup withholding, the payee must contact the FTB to provide a valid taxpayer identification number, before filing the tax return. Failure to provide a valid taxpayer identification number may result in a denial of the backup withholding credit. For more information, go to ftb.ca.gov and search for backup withholding.

Registered Domestic Partners (RDPs) – Under California law, RDPs must file their California income tax return using either the married/RDP filing jointly or married/RDP filing separately filing status. RDPs have the same legal benefits, protections, and responsibilities as married couples unless otherwise specified.

If you entered into a same sex legal union in another state, other than a marriage, and that union has been determined to be substantially equivalent to a California registered domestic partnership, you are required to file a California income tax return using either the married/RDP filing jointly or married/RDP filing separately filing status.

For purposes of California income tax, references to a spouse, husband, or wife also refer to a California RDP, unless otherwise specified. When we use the initials RDP, they refer to both a California registered domestic “partner” and a California registered domestic “partnership,” as applicable. For more information on RDPs, get FTB Pub. 737.

Direct Deposit Refund – You can request a direct deposit refund on your tax return whether you e-file or file a paper tax return. Be sure to fill in the routing and account numbers carefully and double-check the numbers for accuracy to avoid it being rejected by your bank.

Direct Deposit for ScholarShare 529 College Savings Plans – If you have a ScholarShare 529 College Savings Plan account maintained by the ScholarShare Investment Board, you may have your refund directly deposited to your ScholarShare account. Go to scholarshare529.com for instructions.

California Disclosure Obligations – If the individual was involved in a reportable transaction, including a listed transaction, the individual may have a disclosure requirement. Attach federal Form 8886, Reportable Transaction Disclosure Statement, to the back of the California tax return along with any other supporting schedules. If this is the first time the reportable transaction is disclosed on the tax return, send a duplicate copy of the federal Form 8886 to the address below. The FTB may impose penalties if the individual fails to file federal Form 8886, or fails to provide any other required information. A material advisor is required to provide a reportable transaction number to all taxpayers and material advisors for whom the material advisor acts as a material advisor.

Mail

Tax Shelter Filing
ABS 389 MS F340
Franchise Tax Board
PO Box 1673
Sacramento, CA 95812-9900

For more information, go to ftb.ca.gov and search for disclosure obligation.

Which Form Should I Use?

Tip: e-file and you won’t have to decide which form to use! The software will select the correct form for you.

Were you and your spouse/RDP residents during the entire year 2023?

• Yes. Check the chart below to see which form to use.
• No. Use Form 540NR. To download or order the California Nonresident or Part‑Year Resident Booklet, go to ftb.ca.gov/forms or see “Where to Get Income Tax Forms and Publications.”

Tip:

If you qualify to use Form 540 2EZ, you may be eligible to use CalFile.

Visit ftb.ca.gov and search for calfile. It’s fast, easy, and free.

If you don’t qualify for CalFile, you qualify for e-file.

Go to ftb.ca.gov and search for efile options.

2023 Instructions for Form 540
California Resident Income Tax Return

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

Before You Begin

Complete your federal income tax return Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors, before you begin your Form 540, California Resident Income Tax Return. Use information from your federal income tax return to complete your Form 540. Complete and mail Form 540 by April 15, 2024. If unable to mail your tax return by this date, see "Important Dates" at the beginning of these instructions. Also, see “Interest and Penalties” section for information regarding a one-time timeliness penalty abatement.

Tip: You may qualify for the federal earned income credit. See "$$$ for You" at the beginning of the booklet for more information.

Note: The lines on Form 540 are numbered with gaps in the line number sequence. For example, line 20 through line 30 do not appear on Form 540, so the line number that follows line 19 on Form 540 is line 31.

Caution: Form 540 has six sides. When filing Form 540, you must send all six sides to the Franchise Tax Board (FTB).

If you need to amend your California resident income tax return, complete an amended Form 540 and check the box at the top of Form 540 indicating AMENDED return. Attach Schedule X, California Explanation of Amended Return Changes, to the amended Form 540. For specific instructions, see “Instructions for Filing a 2023 Amended Return.”

To use our automated phone service and codes, call 800-338-0505. For the complete code list, see "Automated Phone Service".

Filling in Your Tax Return

• Use black or blue ink on the tax return you send to the FTB.
• Enter your social security number(s) or individual taxpayer identification number(s) at the top of Form 540, Side 1 through Side 6.
• Print numbers and CAPITAL LETTERS in the space provided. Be sure to line up dollar amounts.
• If you do not have an entry for a line, leave it blank unless the instructions for a line specifically tell you to enter -0-. Do not enter a dash or the word “NONE.”

Name(s) and Address

Print your first name, middle initial, last name, and street address in the spaces provided at the top of the form.

Suffix

Use the Suffix field for generational name suffixes such as “SR”, “JR”, “III”, “IV”. Do not enter academic, professional, or honorary suffixes.

Additional Information

Use the Additional Information field for “In-Care-Of” name and other supplemental address information only.

Foreign Address

If you have a foreign address, follow the country’s practice for entering the city, county, province, state, country, and postal code, as applicable, in the appropriate boxes. Do not abbreviate the country name.

Principal Business Activity (PBA) Code

For federal Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship), business filers, enter the numeric PBA code from federal Schedule C (Form 1040), line B.

Date of Birth (DOB)

Enter your DOBs (mm/dd/yyyy) in the spaces provided. If your filing status is married/RDP filing jointly or married/RDP filing separately, enter the DOBs in the same order as the names.

Prior Name

If you or your spouse/RDP filed your 2022 tax return under a different last name, write the last name only from the 2022 tax return.

Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)

Enter your SSN in the spaces provided. If filing a joint tax return, enter the SSNs in the same order as the names.

If you do not have an SSN because you are a nonresident or resident alien for federal tax purposes, and the Internal Revenue Service (IRS) issued you an ITIN, enter the ITIN in the space for the SSN. An ITIN is a tax processing number issued by the IRS to foreign nationals and others who have a federal tax filing requirement and do not qualify for an SSN. It is a nine-digit number that always starts with the number 9.

Principal Residence

If you are under 18 years old or have not filed a California resident income tax return in the prior year, then leave the county and principal/physical address fields blank.

Only complete this section if you are age 18 or older and you have filed a California resident income tax return in the prior year.

• County – Enter the county where you have your principal/physical residence on the date that you file your Form 540. If you reside in a foreign country at the time of filing, leave the county field blank.
• If your principal/physical residence address at the time of filing is the same as the address you provided at the top of this form, check the box provided on this line.
• If your principal/physical residence address at the time of filing is different from the address at the top of this form, provide the address of your principal/physical residence in the spaces provided.
• If you reside in a foreign country at the time of filing, enter the city, province or state, and country in the city field. Follow the country’s practice for entering the postal code. Do not abbreviate the country name.

Filing Status

Line 1 through Line 5 – Filing Status

Check only one box for line 1 through line 5. Enter the required additional information if you checked the box on line 3 or line 5. See filing status requirements.

Usually, your California filing status must be the same as the filing status you used on your federal income tax return.

Exception for Married Taxpayers Who File a Joint Federal Income Tax Return – You may file separate California returns if either spouse was either of the following:

• An active member of the United States Armed Forces or any auxiliary military branch during 2023.
• A nonresident for the entire year and had no income from California sources during 2023.

  Caution – Community Property States: If either spouse earned California source income while domiciled in a community property state, the community income will be split equally between the spouses. Both spouses will have California source income and they will not qualify for the nonresident spouse exception. For more information, get FTB Pub. 1031, Guidelines for Determining Resident Status.

If you had no federal filing requirement, use the same filing status for California you would have used to file a federal income tax return.

Registered domestic partners (RDPs) who file single for federal must file married/RDP filing jointly or married/RDP filing separately for California. If you are an RDP and file head of household for federal purposes, you may file head of household for California purposes only if you meet the requirements to be considered unmarried or considered not in a domestic partnership.

If you filed a joint tax return and either you or your spouse/RDP was a nonresident for 2023, you must file Form 540NR, California Nonresident or Part-Year Resident Income Tax Return.

Exemptions

Line 6 – Can be Claimed as Dependent

Automated Phone code: 601

Check the box on line 6 if someone else can claim you or your spouse/RDP as a dependent on their tax return, even if they chose not to.

Line 7 – Personal Exemptions

Did you check the box on line 6?

No

Follow the instructions on Form 540, line 7.

Yes

Ignore the instructions on Form 540, line 7. Instead, enter in the box on line 7 as shown below for your filing status:

• Single or married/RDP filing separately, enter -0-.
• Head of household, enter -0-.
• Married/RDP filing jointly and both you and your spouse/RDP can be claimed as dependents, enter -0-.
• Married/RDP filing jointly and only one spouse/RDP can be claimed as a dependent, enter 1.

Do not claim this credit if someone else can claim you as a dependent on their tax return.

Line 8 – Blind Exemptions

The first year you claim this exemption credit, attach a doctor’s statement to the back of Form 540 indicating you or your spouse/RDP are visually impaired. If you e-file, attach any requested forms, schedules, and documents according to your software’s instructions. Visually impaired means not capable of seeing better than 20/200 while wearing glasses or contact lenses, or if your field of vision is not more than 20 degrees.

Do not claim this credit if someone else can claim you as a dependent on their tax return.

Line 9 – Senior Exemptions

If you were 65 years of age or older by December 31, 2023*, you should claim an additional exemption credit on line 9. If you are married/or an RDP, each spouse/RDP 65 years of age or older should claim an additional credit. You may contribute all or part of this credit to the California Seniors Special Fund. See “Voluntary Contribution Fund Descriptions” for more information.

*If your 65th birthday is on January 1, 2024, you are considered to be age 65 on December 31, 2023.

Do not claim this credit if someone else can claim you as a dependent on their tax return.

Line 10 – Dependent Exemptions

To claim an exemption credit for each of your dependents, you must write each dependent’s first and last name, SSN or ITIN, and relationship to you in the space provided. If you are claiming more than three dependents, attach a statement with the required dependent information to your tax return. The persons you list as dependents must be the same persons you listed as dependents on your federal income tax return. If you filed form FTB 3568, Alternative Identifying Information for the Dependent Exemption Credit, to qualify to claim your dependents for California purposes, the dependents you claim on your California income tax return may not match those claimed on your federal income tax return. Count the number of dependents listed and enter the total in the box on line 10. Multiply the number you entered by the pre-printed dollar amount and enter the result.

For taxable years beginning on or after January 1, 2018, taxpayers claiming a dependent exemption credit for a dependent who is ineligible for an SSN and a federal ITIN may provide alternative information to the FTB to identify the dependent.

To claim the dependent exemption credit, taxpayers complete form FTB 3568, attach the form and required documentation to their tax return, and write “no id” in the SSN field of line 10, Dependents, on Form 540. For each dependent being claimed that does not have an SSN and an ITIN, a form FTB 3568 must be provided along with supporting documentation. If you e-file, attach any requested forms, schedules, and documents according to your software’s instructions.

Taxpayers may amend their tax returns beginning with taxable year 2018 to claim the dependent exemption credit. These taxpayers should complete an amended Form 540, write “no id” in the SSN field on the Dependents line, and attach Schedule X. To complete Schedule X, check box m for “Other” on Part II, line 1, and write the explanation "Claim dependent exemption credit with no id and form FTB 3568 is attached" on Part II, line 2. Make sure to attach form FTB 3568 and the required supporting documents in addition to the amended tax return and Schedule X. If taxpayers do not claim the dependent exemption credit on their original 2023 tax return, they may amend their 2023 tax return following the same procedures used to amend their previous year amended tax returns beginning with taxable year 2018. If claiming a refund, taxpayers must amend their returns within the statute of limitations. For more information, get FTB Notice 2021-01.

If your dependent child was born and died in 2023 and you do not have an SSN or an ITIN for the child, write “Died” in the space provided for the SSN and include a copy of the child’s birth certificate, death certificate, or hospital records. The document must show the child was born alive. If you e-file, attach any requested forms, schedules, and documents according to your software’s instructions.

Line 11 – Exemption Amount

Add line 7 through line 10 and enter the total dollar amount of all exemptions for personal, blind, senior, and dependent.

Taxable Income

Refer to your completed federal income tax return to complete this section.

Line 12 – State Wages

Automated Phone code: 204

Enter the total amount of your state wages from all states from each of your federal Form(s) W-2, Wage and Tax Statement. This amount appears on federal Form W-2, box 16.

If you received wages and do not have a federal Form W-2, see “Attachments to your tax return.”

Line 13 – Federal Adjusted Gross Income (AGI) from federal Form 1040 or Form 1040-SR, line 11

RDPs who file a California tax return as married/RDP filing jointly and have no RDP adjustments between federal and California, combine their individual AGIs from their federal tax returns filed with the IRS. Enter the combined AGI on line 13.

RDP adjustments include but are not limited to the following:

• Transfer of property between spouses/RDPs
• Capital loss
• Transactions between spouses/RDPs
• Sale of residence
• Dependent care assistance
• Investment interest
• Qualified residence interest acquisition loan & equity loan
• Expense depreciation property limits
• Individual Retirement Account
• Interest education loan
• Rental real estate passive loss
• Rollover of publicly traded securities gain into specialized small business investment companies

RDPs filing as married/RDP filing separately, former RDPs filing single, and RDPs with RDP adjustments will use the California RDP Adjustments Worksheet in FTB Pub. 737, Tax Information for Registered Domestic Partners, or complete a federal pro forma Form 1040 or 1040-SR. Transfer the amount from the California RDP Adjustments Worksheet, line 27, column D, or federal pro forma Form 1040 or 1040-SR, line 11, to Form 540, line 13.

Line 14 – California Adjustments – Subtractions [from Schedule CA (540), Part I, line 27, column B]

If there are no differences between your federal and California income or deductions, do not file Schedule CA (540), California Adjustments – Residents.

If there are differences between your federal and California income, e.g., social security benefits, complete Schedule CA (540). Follow the instructions for Schedule CA (540). Enter on line 14 the amount from Schedule CA (540), Part I, line 27, column B. If a negative amount, see Schedule CA (540), Part I, line 27 instructions.

Line 15 – Subtotal

Subtract the amount on line 14 from the amount on line 13. Enter the result on line 15. If the amount on line 13 is less than zero, combine the amounts on line 13 and line 14 and enter the result in parentheses. For example: “(12,325).”

Line 16 – California Adjustments – Additions [from Schedule CA (540), Part I, line 27, column C]

If there are differences between your federal and California deductions, complete Schedule CA (540). Follow the instructions for Schedule CA (540). Enter on line 16 the amount from Schedule CA (540), Part I, line 27, column C. If a negative amount, see Schedule CA (540), Part I, line 27 instructions.

Line 18 – California Itemized Deductions or California Standard Deduction

Decide whether to itemize your charitable contributions, medical expenses, mortgage interest paid, taxes, etc., or take the standard deduction. Your California income tax will be less if you take the larger of:

• Your California itemized deductions.
• Your California standard deduction.

California itemized deductions may be limited based on federal AGI. To compute limitations, use Schedule CA (540). RDPs, use your recalculated federal AGI to figure your itemized deductions.

On federal tax returns, individual taxpayers who claim the standard deduction are allowed an additional deduction for net disaster losses. For California, deductions for disaster losses are only allowed for those individual taxpayers who itemized their deductions.

If married/or an RDP and filing separate tax returns, you and your spouse/RDP must either both itemize your deductions (even if the itemized deductions of one spouse/RDP are less than the standard deduction) or both take the standard deduction.

If someone else can claim you as a dependent, you may claim the greater of the standard deduction or your itemized deductions. To figure your standard deduction, use the California Standard Deduction Worksheet for Dependents.

Itemized deductions – Figure your California itemized deductions by completing Schedule CA (540), Part II, line 1 through line 30. Enter the result on Form 540, line 18.

If you did not itemize deductions on your federal income tax return but will itemize deductions for your Form 540, first complete federal Schedule A (Form 1040), Itemized Deductions. Then check the box on Side 5, Part II of the Schedule CA (540) and complete Part II. Attach both the federal Schedule A (Form 1040) and California Schedule CA (540) to the back of your tax return.

Standard deduction – Find your standard deduction on the California Standard Deduction Chart for Most People. If you checked the box on Form 540, line 6, use the California Standard Deduction Worksheet for Dependents.

California Standard Deduction Chart for Most People

Do not use this chart if your parent, or someone else, can claim you (or your spouse/RDP) as a dependent on their tax return.

The California standard deduction amounts are less than the federal standard deduction amounts.

California Standard Deduction Worksheet for Dependents

Use this worksheet only if your parent, or someone else, can claim you (or your spouse/RDP) as a dependent on their return. Use whole dollars only.

1. Enter your earned income from line 2 of the “Standard Deduction Worksheet for Dependents" in the instructions for federal Form 1040 or 1040-SR.
2. Minimum standard deduction: $1,250.00.
3. Enter the larger of line 1 or line 2 here.
4. Enter the amount shown for your filing status:
   • Single or married/RDP filing separately, enter $5,363.
   • Married/RDP filing jointly, head of household, or qualifying surviving spouse/RDP, enter $10,726.
5. Standard deduction. Enter the smaller of line 3 or line 4 here and on Form 540, line 18.

Line 19 – Taxable Income

Capital Construction Fund (CCF) – If you claim a deduction on your federal Form 1040 or 1040-SR, line 15 for the contribution made to a CCF set up under the federal Merchant Marine Act of 1936, reduce the amount you would otherwise enter on line 19 by the amount of the deduction. Next to line 19, write “CCF” and the amount of the deduction. For more information, get federal Pub. 595, Capital Construction Fund for Commercial Fishermen.

Tax

When figuring your tax, use the correct filing status and taxable income amount.

Line 31 – Tax

To figure your tax, use one or more of the following methods and check the matching box(es) on line 31, as applicable:

• Tax Table – If your taxable income on line 19 is $100,000 or less, use the tax table. Use the correct filing status column in the tax table.
• Tax Rate Schedules – If your taxable income on line 19 is over $100,000, use the tax rate schedule for your filing status.
• FTB 3800 – Generally, use form FTB 3800, Tax Computation for Certain Children with Unearned Income, to figure the tax on a separate Form 540 for your child who was age 18 and under or a student under age 24 on January 1, 2024, and who had more than $2,500 of investment income. Attach form FTB 3800 to the child’s Form 540.
• FTB 3803 – If, as a parent, you elect to report your child’s interest and dividend income of more than $1,250 but less than $12,500 on your tax return, complete form FTB 3803, Parents’ Election to Report Child’s Interest and Dividends. File a separate form FTB 3803 for each child whose income you elect to include on your Form 540. Add the amount of tax, if any, from each form FTB 3803, line 9, to the amount of your tax from the tax table or tax rate schedules and enter the result on Form 540, line 31. Attach form(s) FTB 3803 to your tax return.

To prevent possible delays in processing your tax return or refund, enter the correct tax amount on this line. To automatically figure your tax or to verify your tax calculation, use our online tax calculator. Go to ftb.ca.gov/tax-rates.

Tip: CalFile or e-file and you won’t have to do the math. Go to ftb.ca.gov and search for efile.

Line 32 – Exemption Credits

Exemption credits reduce your tax. If your federal AGI on line 13 is more than the amount shown below for your filing status, your credits will be limited.

For purposes of computing limitations based upon AGI, RDPs recalculate their AGI using a federal pro forma Form 1040 or Form 1040-SR, or California RDP Adjustments Worksheet (located in FTB Pub. 737). If your recalculated federal AGI is more than the amount shown below for your filing status, your credits will be limited.

Yes

Complete the AGI Limitation Worksheet that follows.

No

Follow the instructions on Form 540, line 32.

AGI Limitation Worksheet

Use whole dollars only.

1. Enter the amount from Form 540, line 13.
2. Enter the amount for your filing status on line b:
   • Single or married/RDP filing separately: $237,035
   • Married/RDP filing jointly or qualifying surviving spouse/RDP: $474,075
   • Head of household: $355,558
3. Subtract line b from line a.
4. Divide line c by $2,500 ($1,250 if married/RDP filing separately). If the result is not a whole number, round it to the next higher whole number.
5. Multiply line d by $6.
6. Add the numbers from the boxes on Form 540, lines 7, 8, and 9 (not the dollar amounts).
7. Multiply line e by line f.
8. Add the total dollar amount from Form 540, lines 7, 8, and 9.
9. Subtract line g from line h. If zero or less, enter -0-.
10. Enter the number from the box on Form 540, line 10 (not the dollar amount).
11. Multiply line e by line j.
12. Enter the dollar amount from Form 540, line 10.
13. Subtract line k from line l. If zero or less, enter -0-.
14. Add line i and line m. Enter the result here and on Form 540, line 32.

Line 34 – Tax from Schedule G-1 and Form FTB 5870A

If you received a qualified lump-sum distribution in 2023 and you were born before January 2, 1936, get California Schedule G-1, Tax on Lump-Sum Distributions, to figure your tax by special methods that may result in less tax. Attach Schedule G-1 to your tax return.

If you received accumulation distributions from foreign trusts or from certain domestic trusts, get form FTB 5870A, Tax on Accumulation Distribution of Trusts, to figure the additional tax. Attach form FTB 5870A to your tax return.

To get these forms, see “Order Forms and Publications.”

Special Credits and Nonrefundable Credits

A variety of California tax credits are available to reduce your tax if you qualify. To figure and claim most special credits, you must complete a separate form or schedule and attach it to your Form 540. The Credit Chart included in these instructions describes the credits and provides the name, credit code, and number of the required form or schedule. Many credits are limited to a certain percentage or a certain dollar amount. In addition, the total amount you may claim for all credits is limited by tentative minimum tax (TMT); go to Box A to see if your credits are limited.

If you are not claiming any special credits, go to line 40 and line 46 to see if you qualify for the Nonrefundable Child and Dependent Care Expenses Credit or the Nonrefundable Renter’s Credit.

Box A

Did you complete federal Schedule C, D, E, or F and claim or receive any of the following (Note: If your business gross receipts are less than $1,000,000 from all trades or businesses, you do not have to report alternative minimum tax (AMT). For more information, see line 61 instructions.):

• Accelerated depreciation in excess of straight-line
• Intangible drilling costs
• Depletion
• Circulation expenditures
• Research and experimental expenditures
• Mining exploration/development costs
• Amortization of pollution control facilities
• Income/loss from tax shelter farm activities
• Income/loss from passive activities
• Income from long-term contracts using the percentage of completion method
• Pass-through AMT adjustment from an estate or trust reported on Schedule K-1 (541), Beneficiary's Share of Income, Deductions, Credits, etc.

Yes

Get and complete Schedule P (540), Alternative Minimum Tax and Credit Limitations – Residents. See “Order Forms and Publications.”

No

Go to Box B.

Box B

Did you claim or receive any of the following:

• Investment interest expense
• Income from incentive stock options in excess of the amount reported on your tax return
• Income from installment sales of certain property

Yes

Get and complete Schedule P (540). See “Order Forms and Publications.”

No

Go to Box C.

Box C

Yes

Get and complete Schedule P (540). See “Order Forms and Publications.”

No

Your credits are not limited. Go to the instructions for line 40.

Line 40 – Nonrefundable Child and Dependent Care Expenses Credit – Code 232

Claim this credit if you paid someone to care for your qualifying child under the age of 13, other dependent who is physically or mentally incapable of caring for him or herself, or spouse/RDP if physically or mentally incapable of caring for him or herself. The care must be provided in California. To claim this credit, your federal AGI must be $100,000 or less and you must complete and attach form FTB 3506, Child and Dependent Care Expenses Credit.

Line 43 through Line 45 – Additional Special Credits

A code identifies each credit. To claim only one or two credits, enter the credit name, code, and amount of the credit on line 43 and line 44.

To claim more than two credits, use Schedule P (540), Part III. Get Schedule P (540) instructions, “How to Claim Your Credits.”

Important: Attach Schedule P (540) and any supporting schedules or statements to your Form 540.

Carryovers: If you claim a credit with carryover provisions and the amount of the credit available this year exceeds your tax, carry over any excess credit to future years until the credit is used (unless the carryover period is a fixed number of years). If you claim a credit carryover for an expired credit, use form FTB 3540, Credit Carryover and Recapture Summary, to figure the amount of the credit. Otherwise, enter the amount of the credit on Schedule P (540), Part III, and do not attach form FTB 3540.

Credit for Joint Custody Head of Household – Code 170

You may not claim this credit if you used the married/RDP filing jointly, head of household, or qualifying surviving spouse/RDP filing status.

Claim the credit if unmarried and not an RDP at the end of 2023 (or if married/or an RDP, you lived apart from your spouse/RDP for all of 2023 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.

Also, the custody arrangement for the child must be part of a decree of dissolution or legal separation or part of a written agreement between the parents where the proceedings have been initiated, but a decree of dissolution or legal separation has not yet been issued.

Use the worksheet below to figure the Joint Custody Head of Household credit using whole dollars only.

1. Enter the amount from Form 540, line 35.
2. Credit percentage – 30%: .30
3. Credit amount. Multiply line 1 by line 2.
   Enter the result or $573, whichever is less.

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.

Credit for Dependent Parent – Code 173

You may not claim this credit if you used the single, head of household, qualifying surviving spouse/RDP, 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 2023 and you used the married/RDP filing separately filing status.
• Your spouse/RDP 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.

To figure the amount of this credit, use the worksheet for the Credit for Joint Custody Head of Household within this line instructions. If you qualify for the Credit for Joint Custody Head of Household and the Credit for Dependent Parent, claim only one. Select the credit that will allow the maximum benefit.

Credit for Senior Head of Household – Code 163

You may claim this credit if you:

• Were 65 years of age or older on December 31, 2023*.
• Qualified as a head of household in 2021 or 2022 by providing a household for a qualifying individual who died during 2021 or 2022.
• Did not have AGI over $92,719 for 2023.

*If your 65th birthday is on January 1, 2024, you are considered to be age 65 on December 31, 2023.

If you meet all the conditions listed for this credit, you do not need to qualify to use the head of household filing status for 2023 in order to claim this credit.

Use this worksheet to figure this credit using whole dollars only.

1. Enter the amount from Form 540, line 19.
2. Credit percentage – 2%: .02
3. Credit amount. Multiply line 1 by line 2.
   Enter the result or $1,748, whichever is less.

Credit for Child Adoption Costs – Code 197

For the year in which an adoption decree or an order of adoption is entered (e.g., adoption is final), 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.

Treat a prior unsuccessful attempt to adopt a child (even when the costs were incurred in a prior year) and a later successful adoption of a different child as one effort when computing the cost of adopting the child. Include the following costs if directly related to the adoption process:

• Fees for Department of Social Services or a licensed adoption agency.
• Medical expenses not reimbursed by insurance.
• Travel expenses for the adoptive family.

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.
• Any deduction for the expenses used to claim this credit must be reduced by the amount of the child adoption costs credit claimed.

Use the worksheet below to figure this credit using whole dollars only. If more than one adoption qualifies for this credit, complete a separate worksheet for each adoption. The maximum credit is limited to $2,500 per minor child.

1. Enter qualifying costs for the child.
2. Credit percentage – 50%: .50
3. Credit amount. Multiply line 1 by line 2.
   Do not enter more than $2,500.

Your allowable credit is limited to $2,500. Carry over the excess credit to future years until the credit is used.

Line 46 – Nonrefundable Renter’s Credit

If you paid rent for at least six months in 2023 on your principal residence located in California you may qualify to claim the nonrefundable renter’s credit which may reduce your tax. Complete the Nonrefundable Renter's Credit Qualification Record included in these instructions.

Line 48

Subtract the amount on line 47 from the amount on line 35. Enter the result on line 48. If the amount on line 47 is more than the amount on line 35, enter -0-.

Other Taxes

Attach the specific form or statement required for each item below.

Line 61 – Alternative Minimum Tax (AMT)

If you claim certain types of deductions, exclusions, and credits, you may owe AMT if your total income is more than:

• $116,229 married/RDP filing jointly or qualifying surviving spouse/RDP
• $87,171 single or head of household
• $58,111 married/RDP filing separately

A child under age 19 or a student under age 24 may owe AMT if the sum of the amount on line 19 (taxable income) and any preference items listed on Schedule P (540) and included on the return is more than the sum of $8,950 and the child’s earned income.

AMT income does not include income, adjustments, and items of tax preference related to any trade or business of a qualified taxpayer who has gross receipts, less returns and allowances, during the taxable year of less than $1,000,000 from all trades or businesses.

Get Schedule P (540) for more information. See “Order Forms and Publications.”

Line 62 – Mental Health Services Tax

If your taxable income is more than $1,000,000, compute the Mental Health Services Tax using whole dollars only:

1. Taxable income from Form 540, line 19.
2. Less: $(1,000,000)
3. Subtotal
4. Tax rate – 1%: .01
5. Mental Health Services Tax – Multiply line 3 by line 4. Enter this amount here and on line 62.

Line 63 – Other Taxes and Credit Recapture

If you received an early distribution of a qualified retirement plan and were required to report additional tax on your federal tax return, you may also be required to report additional tax on your California tax return. Get form FTB 3805P, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts. If required to report additional tax, report it on line 63 and write “FTB 3805P” to the left of the amount.

In general, California conforms to federal law for income received under IRC Section 409A on a nonqualified deferred compensation (NQDC) plan and discounted stock options and stock appreciation rights. Income received under IRC Section 409A is subject to an additional 5% tax of the amount required to be included in income plus interest. Include the additional tax, if any, on line 63. Write “NQDC” on the dotted line to the left of the amount.

If you owe interest on deferred tax from installment obligations, include the additional tax, if any, in the amount you enter on line 63. Write “IRC Section 453A interest” and the amount on the dotted line to the left of the amount on line 63.

If you used form(s):

• FTB 3531, California Competes Tax Credit – Enter only the recaptured amount used. Get the instructions for form FTB 3531, Part III, Credit Recapture, for more information.
• FTB 3540, Credit Carryover and Recapture Summary
• FTB 3554, New Employment Credit

Include the additional tax for credit recapture, if any, on line 63. Write the form number and the amount on the dotted line to the left of the amount on line 63.

Payments

To avoid a delay in the processing of your tax return, enter the correct amounts on line 71 through line 74.

Line 71 – California Income Tax Withheld

Enter the total California income tax withheld from your federal Forms:

• W-2, Wage and Tax Statement, box 17
• W-2G, Certain Gambling Winnings, box 15
• 1099-DIV, Dividends and Distributions, box 16
• 1099-INT, Interest Income, box 17
• 1099-K, Payment Card and Third Party Network Transactions, box 8
• 1099-MISC, Miscellaneous Information, box 16
• 1099-NEC, Nonemployee Compensation, box 5
• 1099-OID, Original Issue Discount, box 14
• 1099-R, Distributions from Pensions, Annuities, Retirement, or Profit Sharing Plans, IRAs, Insurance Contracts, etc., box 14

Do not include city, local, or county tax withheld, tax withheld by other states, or nonconsenting nonresident (NCNR) member’s tax from Schedule K-1 (568), Member's Share of Income, Deductions, Credits, etc., line 15e. Do not include withholding from Form 592-B, Resident and Nonresident Withholding Tax Statement, or Form 593, Real Estate Withholding Statement, on this line. For more details, see instructions for line 73.

Generally, tax should not be withheld on federal Form 1099-MISC or Form 1099-NEC. If you want to pre-pay tax on income reported on federal Form 1099-MISC or Form 1099-NEC, use Form 540-ES, Estimated Tax for Individuals.

Line 72 – 2023 California Estimated Tax and Other Payments

Enter the total of any:

• California estimated tax payments you made using 2023 Form 540-ES, electronic funds withdrawal, Web Pay, or credit card.
• Overpayment from your 2022 California income tax return that you applied to your 2023 estimated tax.
• Payment you sent with form FTB 3519, Payment for Automatic Extension for Individuals.
• California estimated tax payments made on your behalf by an estate, trust, or S corporation on Schedule K-1 (541) or Schedule K-1 (100S), Shareholder's Share of Income, Deductions, Credits, etc.

Tip: To view payments made or get your current account balance, go to ftb.ca.gov and login or register for MyFTB.

If you and your spouse/RDP paid joint estimated taxes but are now filing separate income tax returns, either of you may claim the entire amount paid, or each may claim part of the joint estimated tax payments. If you want the estimated tax payments to be divided, notify the FTB before you file the tax returns so the payments can be applied to the proper account. The FTB will accept in writing, any divorce agreement (or court-ordered settlement) or a statement showing the allocation of the payments along with a notarized signature of both taxpayers.

Send statements to:

Mail

Joint Estimate Credit Allocation MS F283
Taxpayer Services Center
Franchise Tax Board
PO Box 942840
Sacramento, CA 94240-0040

If you or your spouse/RDP made separate estimated tax payments, but are now filing a joint income tax return, add the amounts you each paid. Attach a statement to the front of Form 540 explaining that payments were made under both SSNs. If you e-file, attach any requested forms, schedules, and documents according to your software’s instructions.

You do not have to make estimated tax payments if you are a nonresident or new resident of California in 2024 and did not have a California tax liability in 2023.

Line 73 – Withholding (Form 592-B and/or Form 593)

Enter the total of California withholding from Form 592-B and Form 593. Attach a copy of Form(s) 592-B and 593 to the lower front of Form 540, Side 1.

If your filing status changed after escrow closed and before filing your California tax return, contact us at 888-792-4900 prior to filing your California tax return for instructions on how to claim your withholding credit.

Caution: Do not include withholding from federal Form(s) W-2, W-2G, or 1099, or NCNR member’s tax from Schedule K-1 (568), line 15e on this line.

Line 74 – Excess California SDI (or VPDI) Withheld

You may claim a credit for excess State Disability Insurance (SDI) or Voluntary Plan Disability Insurance (VPDI) if you meet all of the following conditions:

• You had two or more California employers during 2023.
• You received more than $153,164 in gross wages from California sources.
• The amounts of SDI (or VPDI) withheld appear on your federal Form(s) W-2. Be sure to attach your federal Form(s) W-2 to the lower front of your Form 540.

If SDI (or VPDI) was withheld from your wages by a single employer, at more than 0.9% of your gross wages, you may not claim excess SDI (or VPDI) on your Form 540. Contact the employer for a refund.

To determine the amount to enter on line 74, complete the following Excess SDI (or VPDI) Worksheet. If married/RDP filing jointly, figure the amount of excess SDI (or VPDI) separately for each spouse/RDP.

Excess SDI (or VPDI) Worksheet

Use whole dollars only.

Follow the instructions below to figure the amount of excess SDI to enter on Form 540, line 74. If you are married/RDP and file a joint return, you must figure the amount of excess SDI (or VPDI) separately for each spouse/RDP.

Line 75 – Earned Income Tax Credit (EITC)

Enter your Earned Income Tax Credit from form FTB 3514, California Earned Income Tax Credit, line 20.

Line 76 – Young Child Tax Credit (YCTC)

Enter your Young Child Tax Credit from form FTB 3514, line 28.

Line 77 – Foster Youth Tax Credit (FYTC)

Enter your Foster Youth Tax Credit from form FTB 3514, line 39.

Line 78

For the Claim of Right credit, follow the reporting instructions in Schedule CA (540), Part II, line 16 under the Claim of Right.

Claim of Right: If you are claiming the tax credit on your California tax return, include the amount of the credit in the total for this line. Write in “IRC 1341” and the amount of the credit to the left of the amount column.

To determine if you are entitled to this credit, refer to your prior year California Form 540 or Schedule CA (540) to verify the amount was included in your California taxable income. If the amount repaid under a “Claim of Right” was not originally taxed by California, you are not entitled to claim the credit.

Use Tax

Line 91 – Use Tax

You are required to enter a number on this line. If the amount due is zero, you must check the applicable box to indicate that you either owe no use tax, or you paid your use tax obligation directly to the California Department of Tax and Fee Administration.

You may owe use tax if you make purchases from out-of-state retailers (for example, purchases made by telephone, online, by mail, or in person) where California sales or use tax was not paid and you use those items in California.

If you have questions about whether a purchase is taxable, go to the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov, or call its Customer Service Center at 1-800-400-7115 (CRS:711) (for hearing and speech disabilities).

Some taxpayers are required to report business purchases subject to use tax directly to the California Department of Tax and Fee Administration. However, they may report certain personal purchases subject to use tax on the FTB income tax return.

You may not report business purchases subject to use tax on your income tax return if you:

• Have or are required to hold a California seller’s permit.
• Make more than $10,000 in purchases subject to use tax per calendar year and have not paid use tax on those purchases to a retailer engaged in business in California or to a retailer authorized by the California Department of Tax and Fee Administration to collect the tax.
• Are otherwise registered or required to be registered with the California Department of Tax and Fee Administration to report use tax.

Note: You may not report use tax on your income tax return for certain types of transactions. These types of transactions are described in detail below in the instructions.

The Use Tax Worksheet and Estimated Use Tax Lookup Table will help you determine how much use tax to report. If you owe use tax but you do not report it on your income tax return, you must report and pay the tax to the California Department of Tax and Fee Administration. For information on how to report use tax directly to the California Department of Tax and Fee Administration, go to their website at cdtfa.ca.gov and type “Find Information About Use Tax” in the search bar.

Failure to report and pay timely may result in the assessment of interest, penalties, and fees.

See general explanation of California use tax.

Use Tax Worksheet

You must use the Use Tax Worksheet to calculate your use tax liability, if any of these apply:

• You prefer to calculate the amount of use tax due based upon your actual purchases subject to use tax, rather than based on an estimate.
• You owe use tax on any item purchased for use in a trade or business and you are not registered or required to be registered with the California Department of Tax and Fee Administration to report sales or use tax.
• You owe use tax on purchases of individual items with a purchase price of $1,000 or more each.

Example 1: You purchased a television for $2,000 from an out-of-state retailer that did not collect tax. You must use the Use Tax Worksheet to calculate the tax due on the price of the television, since the price of the television is $1,000 or more.

Example 2: You purchased a computer monitor for $300, a rare coin for $500, and designer clothing for $250 from out-of-state retailers that did not collect tax. Although the total price of all the items is $1,050, the price of each item is less than $1,000. Since none of these individual items are $1,000 or more, you are not required to use the Use Tax Worksheet and may choose to use the Estimated Use Tax Lookup Table.

If you have a combination of individual non-business items purchased for $1,000 or more each, and/or items purchased for use in a trade or business in addition to individual, non-business items purchased for less than $1,000, you may either:

• Use the Use Tax Worksheet to compute use tax due on all purchases, or
• Use the Use Tax Worksheet to compute use tax due on all individual items purchased for $1,000 or more plus all items purchased for use in a trade or business.
• Use the Estimated Use Tax Lookup Table to estimate the use tax due on individual, non-business items purchased for less than $1,000, then add the amounts and report the total use tax on Line 91.

Example 3: The total price of the items you purchased from out-of-state retailers that did not collect use tax is $2,300, which includes a $1,000 television, a $900 painting, and a $400 table for your living room.

• You may choose to calculate the use tax due on the total price of $2,300 using the Use Tax Worksheet, or
• You may choose to calculate the use tax due on the $1,000 price of the television using the Use Tax Worksheet and estimate your use tax liability for the painting and table by using the Estimated Use Tax Lookup Table, then add the amounts and report the total use tax on Line 91.

Use Tax Worksheet (See Instructions Below)

Use whole dollars only

1. Enter purchases from out-of-state sellers made without payment of California sales/use tax. If you choose to estimate the use tax due on individual, non-business items purchased for less than $1,000 each, only enter purchases of items with a purchase price of $1,000 or more plus items purchased for use in a trade or business not registered with the California Department of Tax and Fee Administration.
2. Enter the applicable sales and use tax rate.
3. Multiply Line 1 by the tax rate on Line 2. Enter result here.
4. If you choose to estimate the use tax due on individual, non-business items purchased for less than $1,000 each, enter the use tax amount due from the Estimated Use Tax Lookup Table. If all of your purchases are included in Line 1, enter -0-.
5. Add Lines 3 and 4. This is your total use tax.
6. Enter any sales or use tax you paid to another state for purchases included on Line 1. See worksheet instructions below.
7. Subtract Line 6 from Line 5. This is the total use tax due. Enter the amount due on Line 91. If the amount is less than zero, enter -0-.

Worksheet, Line 1, Purchases Subject to Use Tax

Report purchases of items that would have been subject to sales tax if purchased from a California retailer unless your receipt shows that California tax was paid directly to the retailer. For example, generally, you would include purchases of clothing, but not exempt purchases of food products or prescription medicine. For more information on nontaxable and exempt purchases, you may visit the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov.

• Include handling charges.
• Do not include any other state’s sales or use tax paid on the purchases.
• Enter only purchases made during the year that corresponds with the tax return you are filing.
• If you traveled to a foreign country and hand-carried items back to California, generally use tax is due on the purchase price of the goods you listed on your U.S. Customs Declaration less an $800 per-person exemption. For the hand carried items, you should report the amount of purchases in excess of the $800 per-person exemption. This $800 exemption does not apply to goods sent or shipped to California by mail or other common carrier. For goods sent or shipped, you should report the entire amount of the purchases.
• If your filing status is “married/RDP filing separately,” you may elect to report one-half of the use tax due or the entire amount on your income tax return. If you elect to report one-half, your spouse/RDP may report the remaining half on his or her income tax return or on the individual use tax return available from the California Department of Tax and Fee Administration.

Note: You cannot report the following types of purchases on your income tax return.

• Vehicles, vessels, and trailers that must be registered with the Department of Motor Vehicles.
• Mobile homes or commercial coaches that must be registered annually as required by the Health and Safety Code.
• Vessels documented with the U.S. Coast Guard.
• Aircraft.
• Rental receipts from leasing machinery, equipment, vehicles, and other tangible personal property to your customers.
• Cigarettes and tobacco products when the purchaser is registered with the California Department of Tax and Fee Administration as a cigarette and/or tobacco products consumer.

Worksheet, Line 2, Sales and Use Tax Rate

Enter the sales and use tax rate applicable to the place in California where the property was used, stored, consumed, or given away. To find your sales and use tax rate, please go to the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov and type “City and County Sales and Use Tax Rates” in the search bar. You may also call their Customer Service Center at 800-400-7115 (CRS:711) (for hearing and speech disabilities).

Worksheet, Line 6, Credit for Tax Paid to Another State

This is a credit for tax paid to other states on purchases reported on Line 1. You cannot claim a credit for more than the amount of use tax that is imposed on your use of property in this state. For example, if you paid $8.00 sales tax to another state for a purchase, and would have paid $6.00 in California, you can claim a credit of only $6.00 for that purchase.

Estimated Use Tax Lookup Table

You may use the Estimated Use Tax Lookup Table to estimate and report the use tax due on individual non-business items you purchased for less than $1,000 each. This option is only available if you are permitted to report use tax on your income tax return and you are not required to use the Use Tax Worksheet to calculate the use tax owed on all your purchases. Simply include the use tax liability that corresponds to your California Adjusted Gross Income (found on Line 17) and enter it on Line 91. You will not be assessed additional use tax on the individual non business items you purchased for less than $1,000 each.

You may not use the Estimated Use Tax Lookup Table to estimate and report the use tax due on purchases of items for use in your business or on purchases of individual non-business items you purchased for $1,000 or more each. See the instructions for the Use Tax Worksheet if you have a combination of purchases of individual non-business items for less than $1,000 each and purchases of individual non-business items for $1,000 or more.

Enter your use tax liability on Line 4 of the worksheet, or if you are not required to use the worksheet, enter the amount on Line 91 of your income tax return.

ISR Penalty

Line 92 – Individual Shared Responsibility (ISR) Penalty

Check the box on line 92 if you, your spouse/RDP (if filing a joint return), and anyone you can or do claim as a dependent had minimum essential coverage (also referred to as qualifying health care coverage) that covered all of 2023. Medicare Part A or C qualifies as minimum essential coverage. If you check the box on line 92, you do not owe the individual shared responsibility penalty and do not need to file form FTB 3853. For more information, get form FTB 3853.

If you and your household did not have full-year health care coverage, then go to form FTB 3853 to determine if you have an individual shared responsibility penalty. Enter your individual shared responsibility penalty from form FTB 3853, Part IV, line 1.

Overpaid Tax or Tax Due

To avoid delay in processing of your tax return, enter the correct amounts on line 97 through line 100.

If you received a refund for 2022, you may receive a federal Form 1099-G. The refund amount reported on your federal Form 1099-G will be different from the amount shown on your tax return if you claimed the refundable California Earned Income Tax Credit, the Young Child Tax Credit, and/or the Foster Youth Tax Credit. This is because the credit is not part of the refund from withholding or estimated tax payments.

Line 97 – Overpaid Tax

If the amount on line 95 is more than the amount on line 64, your payments and credits are more than your tax. Subtract the amount on line 64 from the amount on line 95. Enter the result on line 97.

Refund Intercept – The FTB administers the Interagency Intercept Collection (IIC) program on behalf of the State Controller’s Office. The IIC program intercepts (offsets) refunds when individuals and business entities owe delinquent debts to government agencies including the IRS and California colleges. All refunds are subject to interception. The FTB only intercepts the amount owed.

Refunds from joint tax returns may be applied to the debts of the taxpayer or spouse/RDP. After all tax liabilities are paid, any remaining credit will be applied to requested voluntary contributions, if any, and the remainder will be refunded.

If the debt was previously paid to the requestor and the FTB also intercepted the refund, any overpayment will be refunded by the agency that received the funds.

For more information, go to ftb.ca.gov and search for interagency intercept collection.

Line 98 – Amount You Want Applied to Your 2024 Estimated Tax

Apply all or part of the amount on line 97 to your estimated tax for 2024. Enter on line 98 the amount of line 97 that you want applied to your 2024 estimated tax.

An election to apply an overpayment to estimated tax is binding. Once the election is made, the overpayment cannot be applied to a deficiency after the due date of the tax return.

Line 99 – Overpaid Tax Available This Year

If you entered an amount on line 98, subtract it from the amount on line 97. Enter the result on line 99. Choose to have this entire amount refunded to you or make voluntary contributions from this amount. See “Voluntary Contribution Fund Descriptions” for more information.

Line 100 – Tax Due

If the amount on line 95 is less than the amount on line 64, subtract the amount on line 95 from the amount on line 64. Enter the result on line 100. Your tax is more than your payments and credits.

There is a penalty for not paying enough tax during the year. You may have to pay a penalty if:

• The tax due on line 100 is $500 or more ($250 or more if married/RDP filing separately).
• The amount of state income tax withheld on line 71 is less than 90% of the amount of your total tax on line 64.

If this applies to you, see instructions on line 113.

Increasing your withholding could eliminate the need to make a large payment with your tax return. To increase your withholding, complete EDD Form DE 4, Employee’s Withholding Allowance Certificate, and give it to your employer’s appropriate payroll staff. Get this form from your employer or by calling EDD at 888-745-3886. Download the DE 4 at edd.ca.gov or to use the online calculator, go to ftb.ca.gov and search for de 4.

Form DE 4 specifically adjusts your California state withholding and is not the same as the federal Form W-4, Employee’s Withholding Certificate.

Contributions

You can make voluntary contributions to the funds listed on Side 4. See “Voluntary Contributions Fund Descriptions” for more information.

You may also contribute any amount to the State Parks Protection Fund/Parks Pass Purchase. To receive a single annual park pass, your contribution must equal or exceed $195. When applicable, the FTB will forward your name and address from your tax return to the Department of Parks and Recreation (DPR) who will issue a single Vehicle Day Use Annual Pass to you. Only one pass will be provided per tax return. You may contact DPR directly to purchase additional passes. If there is an error on your tax return in the computation of total contributions or if we disallow the contribution you requested because there is no credit available for the tax year, your name and address will not be forwarded to DPR. Any contribution less than $195 will be treated as a voluntary contribution and may be deducted as a charitable contribution. For more information go to parks.ca.gov/annualpass/ or email info@parks.ca.gov.

Line 110 – Total Contributions

Add amounts in code 400 through code 445. Enter the result on line 110.

Amount You Owe

Add or subtract correctly to figure the amount you owe.

Line 111 – Amount You Owe

If you do not have an amount on line 99, add the amount on line 94, line 96, line 100, and line 110, if any. Enter the result on line 111.

If you have an amount on line 99 and the amount on line 110 is more than line 99, subtract line 99 from line 110 and enter the difference on line 111.

To avoid a late filing penalty, file your Form 540 by the extended due date even if you cannot pay the amount you owe.

Mandatory Electronic Payments – You are required to remit all your payments electronically once you make an estimate or extension payment exceeding $20,000 or you file an original return with a total tax liability over $80,000. Once you meet this threshold, all subsequent payments regardless of amount, tax type, or taxable year must be remitted electronically. The first payment that would trigger the mandatory e-pay requirement does not have to be made electronically. Individuals that do not send the payment electronically will be subject to a 1% noncompliance penalty.

You can request a waiver from mandatory e-pay if one or more of the following is true:

• You have not made an estimated tax or extension payment in excess of $20,000 during the current or previous taxable year.
• Your total tax liability reported for the previous taxable year did not exceed $80,000.
• The amount you paid is not representative of your total tax liability.

For more information or to obtain the waiver form, go to ftb.ca.gov/e-pay.

Electronic payments can be made using Web Pay on FTB’s website, electronic funds withdrawal (EFW) as part of the e-file return, or your credit card.

Payment Options

• Electronic Funds Withdrawal – Instead of paying by check or money order, use this convenient option if you e-file. Simply provide your bank information, amount you want to pay, and the date you want the balance due to be withdrawn from your account. Your tax preparation software will offer this option.
• Web Pay – Pay the amount you owe using our secure online payment service. Go to ftb.ca.gov/pay for more information.
• Credit Card – Use your Discover, MasterCard, Visa, or American Express card to pay your tax. If you pay by credit card, do not mail form FTB 3519 to us. Call 800-272-9829 or go to the ACI Payments, Inc. (formerly Official Payments) website at officialpayments.com, and use the jurisdiction code 1555. ACI Payments, Inc. charges a convenience fee for using this service.
• Check or Money Order – Using black or blue ink, make your check or money order payable to the “Franchise Tax Board.” Do not send cash or other items of value (such as stamps, lottery tickets, foreign currency, and gift cards). Write your SSN or ITIN and “2023 Form 540” as applicable on the check or money order. Enclose, but do not staple, your payment with your tax return.

  Make all checks or money orders payable in U.S. dollars and drawn against a U.S. financial institution. Do not combine your 2023 tax payment and any 2024 estimated tax payment in the same check. Prepare two separate checks and mail each in a separate envelope.

  If you e-filed your tax return, mail your check or money order with form FTB 3582, Payment Voucher for Individual e-filed Returns. Do not mail a copy of your e-filed tax return.

  A penalty may be imposed if your check is returned by your bank for insufficient funds.

Paying by Credit Card – Whether you e-file or file by mail, use your Discover, MasterCard, Visa, or American Express card to pay your personal income taxes (tax return balance due, extension payment, estimated tax payment, or tax due with bill notice). There is a convenience fee for this service. This fee is paid directly to ACI Payments, Inc. based on the amount of your tax payment.

Convenience Fee

• 2.30% of the tax amount charged (rounded to the nearest cent)
• Minimum fee: $1

Example:

• Tax Payment = $753.56
• Convenience Fee = $17.33

When will my payments be effective?

Your payment is effective on the date you charge it.

What if I change my mind?

If you pay your tax liability by credit card and later reverse the credit card transaction, you may be subject to penalties, interest, and other fees imposed by the FTB for nonpayment or late payment of your tax liability.

How do I use my credit card to pay my income tax bill?

Once you have determined the type of payment and how much you owe, have the following ready:

• Your Discover, MasterCard, Visa, or American Express card
• Credit card number
• Expiration date
• Amount you are paying
• Your and your spouse’s/RDP’s SSN or ITIN
• First 4 letters of your and your spouse’s/RDP’s last name
• Taxable year
• Home phone number (including area code)
• ZIP code for address where your monthly credit card bill is sent
• FTB Jurisdiction Code: 1555

Go to the ACI Payments, Inc. website at officialpayments.com and select Payment Center, or call 800-2PAY-TAX or 800-272-9829 and follow the recorded instructions. ACI Payments, Inc. provides customer assistance at 877-297-7457 Monday through Friday, 5 a.m. to 5 p.m. PST. ACI Payments, Inc. will tell you the convenience fee before you complete your transaction. Decide whether to complete the transaction at that time.

Payment Date:

Confirmation Number:

If you cannot pay the full amount or can only make a partial payment for the amount shown on Form 540, line 114, see the information regarding installment payments in Question 4 of the “Frequently Asked Questions.”

Interest and Penalties

If you file your tax return or pay your tax after the due date, you may owe interest and penalties on the tax due.

Effective for tax years beginning on or after January 1, 2022, you may request a one-time abatement of a timeliness penalty if: (1) you were not previously required to file a California personal income tax return or have not previously been granted first-time abatement, (2) you have filed all required returns as of the date of the request for first-time abatement, and (3) you have paid, or are in a current arrangement to pay, all tax currently due.

Do not reduce the amount on line 97 or increase the amount on line 100 by any penalty or interest amounts. Enter on line 112 the amount of interest and penalties.

Line 112 – Interest and Penalties

Interest – Interest will be charged on any late filing or late payment penalty from the original due date of the return to the date paid. In addition, if other penalties are not paid within 15 days, interest will be charged from the date of the billing notice until the date of payment. Interest compounds daily and the interest rate is adjusted twice a year. The FTB website has a chart of interest rates in effect since 1976. Go to ftb.ca.gov and search for interest rates.

Late Filing of Tax Return – If you do not file your tax return by October 15, 2024, you will incur a late filing penalty plus interest from the original due date of the tax return. The maximum total penalty is 25% of the tax not paid if the tax return is filed after October 15, 2024. The minimum penalty for filing a tax return more than 60 days late is $135 or 100% of the balance due, whichever is less.

Late Payment of Tax – If you fail to pay your total tax liability by April 15, 2024, you will incur a late payment penalty plus interest. The penalty is 5% of the tax not paid when due plus 1/2% for each month, or part of a month, the tax remains unpaid. We may waive the late payment penalty based on reasonable cause. Reasonable cause is presumed when 90% of the tax shown on the return is paid by the original due date of the return. However, the imposition of interest is mandatory. If, after April 15, 2024, you find that your estimate of tax due was too low, pay the additional tax as soon as possible to avoid or minimize further accumulation of penalties and interest.

Late Payment of Use Tax – To avoid late payment penalties for use tax, you must report and pay the use tax with a timely filed income tax return or California Individual Use Tax return.

Other Penalties – We may impose other penalties if a payment is returned for insufficient funds. We may also impose penalties for negligence, substantial understatement of tax, and fraud.

Line 113 – Underpayment of Estimated Tax

You may be subject to an estimated tax penalty if any of the following is true:

• Your withholding and credits are less than 90% of your current tax year liability.
• Your withholding and credits are less than 100% of your prior year tax liability (110% if AGI is more than $150,000 or $75,000 if married/RDP filing separately).
• You did not pay enough through withholding to keep the amount you owe with your tax return under $500 ($250 if married/RDP filing separately).
• You did not make the required estimated tax payments, if you pay an installment after the date it is due, or if you underpay any installment, a penalty may be assessed on the portion of estimated tax that was underpaid from the due date of the installment to the date of payment or the due date of your return, whichever is earlier. Get the 2023 form FTB 5805, Underpayment of Estimated Tax by Individuals and Fiduciaries, for more information.

The FTB can figure the penalty for you when you file your tax return and send you a bill.

Is line 100 less than $500 ($250 if married/RDP filing separately)?

Yes

Stop. You may not be subject to an estimated tax payment penalty.

No

Continue. You may be subject to an estimated tax payment penalty.

Is line 100 less than 10% of the amount on line 48 (excluding the tax on lump-sum distributions on line 34)?

Yes

Stop. You may not be subject to an estimated tax payment penalty.

No

You may be subject to an estimated tax payment penalty; get form FTB 5805 (or form FTB 5805F, Underpayment of Estimated Tax by Farmers and Fishermen).

The underpayment of estimated tax penalty shall not apply to the extent the underpayment of an installment was created or increased by any provision of law that is chaptered during and operative for the taxable year of the underpayment. To request a waiver of the underpayment of estimated tax penalty, get form FTB 5805 or form FTB 5805F. See “Where To Get Income Tax Forms and Publications.”

If you complete one of these forms, attach it to the back of your Form 540. Enter the amount of the penalty on line 113 and check the correct box on line 113. Complete and attach the form if you claim a waiver, use the annualized income installment method, or pay tax according to the schedule for farmers and fishermen, even if you do not owe a penalty.

See “Important Dates” for more information on estimated tax payments and how to avoid the underpayment penalty.

See the instructions for Form 540, line 114 for information about figuring your payment, if any.

Line 114 – Total Amount Due

Is there an amount on line 111?

Yes

Add line 111, line 112, and line 113. Enter the result on line 114. For payment options, see line 111 instructions.

No

Go to line 115.

Make all checks or money orders payable in U.S. dollars and drawn against a U.S. financial institution.

Refund and Direct Deposit

Line 115 – Refund or No Amount Due

Did you report amounts on line 110, line 112, or line 113?

No

Enter the amount from line 99 on line 115. This is your refund amount. If it is less than $1, attach a written statement to your Form 540 requesting the refund.

Yes

Combine the amounts from line 110, line 112, and line 113. If the result is:

• Less than line 99, subtract the sum of line 110, line 112, and line 113 from line 99 and enter the result on line 115. This is your refund amount.
• More than line 99, subtract line 99 from the sum of line 110, line 112, and line 113 and enter the result on line 114. This is your total amount due. For payment options, see line 111 instructions.

Line 116 and Line 117 – Direct Deposit of Refund

Direct deposit is safe and convenient. To have your refund directly deposited into your bank account, fill in the account information on line 116 and line 117. Fill in the routing and account numbers and indicate the account type. Verify routing and account numbers with your financial institution. Do not attach a voided check or deposit slip. See the illustration near the end of the Direct Deposit of Refund instructions.

Individual taxpayers may request that their refund be electronically deposited into more than one checking or savings account. This allows more options for managing your refund. For example, you can request part of your refund go to your checking account to use now and the rest to your savings account to save for later.

The routing number must be nine digits. The first two digits must be 01 through 12 or 21 through 32. On the sample check, the routing number is 250250025. The account number can be up to 17 characters and can include numbers and letters. Include hyphens but omit spaces and special symbols. On the sample check, the account number is 202020.

Check the appropriate box for the type of account. Do not check more than one box for each line.

Enter the portion of your refund you want directly deposited into each account. Each deposit must be at least $1. When filing an original return, the total of line 116 and line 117 must equal the total amount of your refund on line 115. If line 116 and line 117 do not equal line 115, the FTB will issue a paper check.

When filing an amended return, only complete the amended Form 540 through line 115. Next, complete Schedule X. The amount from Schedule X, line 11 is your additional refund amount. This amount will be carried over to your amended Form 540 and will be entered on line 116 and line 117. The total of the amended Form 540, line 116 and line 117 must equal the total amount of your refund on Schedule X, line 11. If the total of the amended Form 540, line 116 and line 117 does not equal Schedule X, line 11, the FTB will issue a paper check.

Adjusted Refunds – If there is a change made to your refund, you will still receive your refund via direct deposit. For more information on direct deposit of adjusted refunds, go to ftb.ca.gov and search for direct deposit.

Caution: Check with your financial institution to make sure your deposit will be accepted and to get the correct routing and account numbers. The FTB is not responsible for a lost refund due to incorrect account information entered by you or your representative.

Prior to depositing the refund, the FTB may first verify with your financial institution that the name on the account you designated to receive the direct deposit refund matches the name provided on the tax return. Some financial institutions will not allow a joint refund to be deposited to an individual account. If the direct deposit is rejected, the FTB will issue a paper check.

Direct Deposit for ScholarShare 529 College Savings Plans – If you have a ScholarShare 529 College Savings Plan account maintained by the ScholarShare Investment Board, you may have your refund directly deposited to your ScholarShare account. Please visit scholarshare529.com for instructions.

Voter Information

Voter registration information – You may register to vote if you meet these requirements:

• You are a United States citizen.
• You are a resident of California.
• You will be 18 years old by the date of the next election.
• You are not in prison or on parole for the conviction of a felony.

For information on voter registration, check the box on Form 540, Side 5, and go to the California Secretary of State website at sos.ca.gov/elections or see "Voting Is Everybody's Business" section on the Additional Information section.

Health Care Coverage Information

If you are interested in no-cost or low-cost health care coverage information, check the "Yes" box on Form 540, Side 5. If you check the "Yes" box, you, and your spouse/RDP if filing a joint return, authorize the FTB to share limited information from your tax return with Covered California (the state agency that provides Californians with access to affordable health insurance) for their outreach and enrollment efforts. Limited information that will be shared include the following:

• Taxpayer name, or in the case of taxpayers filing a joint tax return, the names of both spouses or RDPs.
• Full mailing address listed on the tax return.
• Number and age of household dependents.
• Gross income.

Sign Your Tax Return

You must sign your tax return in the space provided on Form 540, Side 6. If you file a joint tax return, your spouse/RDP must also sign it.

Include your preferred phone number and email address in case the FTB needs to contact you regarding your tax return. By providing this information, the FTB will be able to provide you better customer service.

Joint Tax Return – If you file a joint tax return, both you and your spouse/RDP are generally responsible for the tax and any interest or penalties due on the tax return. This means that if one spouse/RDP does not pay the tax due, the other may be liable. See “Innocent Joint Filer Relief” under Additional Information section for more information.

Paid Preparer’s Information – If you pay a person to prepare your Form 540, that person must sign and complete the applicable paid preparer information on Side 6 including an identification number. The IRS requires a paid tax preparer to get and use a preparer tax identification number (PTIN). If the preparer has a federal employer identification number (FEIN), it should be entered only in the space provided. A paid preparer must give you a copy of your tax return to keep for your records.

Third Party Designee – If you want to allow your preparer, a friend, family member, or any other person you choose to discuss your 2023 tax return with the FTB, check the “Yes” box in the signature area of your tax return. Also, print the designee’s name and telephone number.

If you check the “Yes” box, you, and your spouse/RDP, if filing a joint tax return, are authorizing the FTB to call the designee to answer any questions that may arise during the processing of your tax return. You are also authorizing the designee to:

• Give the FTB any information that is missing from your tax return.
• Call the FTB for information about the processing of your tax return or the status of your refund or payments.
• Receive copies of notices or transcripts related to your tax return, upon request.
• Respond to certain FTB notices about math errors, offsets, and tax return preparation.

You are not authorizing the designee to receive any refund check, bind you to anything (including any additional tax liability), or otherwise represent you before the FTB. If you want to expand or change the designee’s authorization, go to ftb.ca.gov/poa.

The authorization will automatically end no later than the due date (without regard to extensions) for filing your 2024 tax return. This is April 15, 2025, for most people. If you wish to revoke the authorization before it ends, notify us by telephone at 800-852-5711 or by writing to Franchise Tax Board, PO Box 942840, Sacramento, CA 94240-0040. Include your name, SSN (or ITIN), and the designee’s name.

Power of Attorney – If another person prepared your tax return, he or she is not automatically granted access to your tax information in future dealings with us. At some point, you may wish to designate someone to act on your behalf in matters related or unrelated to this tax return (e.g., an audit examination). To protect your privacy, you must submit to us a legal document called a “Power of Attorney” (POA) authorizing another person to discuss or receive personal information about your income tax records.

For more information, go to ftb.ca.gov/poa.

Filing Your Tax Return

Attachments to your tax return.

Do I need to attach a copy of federal Form 1040 or 1040-SR?

Other than Schedule A (Form 1040) or Schedule B (Form 1040), did you attach any federal forms or schedules to your federal Form 1040 or 1040-SR?

If No, do not attach a copy of your federal Form 1040 or 1040-SR return to Form 540.

If Yes, attach a copy of your federal Form 1040 or 1040-SR return and all supporting federal forms and schedules to Form 540.

Exception: If you did not itemize deductions on your federal tax return but will itemize deductions on your California tax return, complete and attach a copy of the federal Schedule A (Form 1040) to Form 540.

Do not attach any documents to your tax return unless specifically instructed. This will help us reduce government processing and storage costs.

Federal Form(s) W-2, W-2G, and 1099, and California Form(s) 592-B and 593.

Attach all the Form(s) W-2 and W-2G you received to the lower front of your tax return. Also, attach any Forms(s) 1099, 592-B, and 593 showing California income tax withheld.

If you do not receive your Form(s) W-2 by January 31, 2024, contact your employer or go to ftb.ca.gov and login or register for MyFTB. Only your employer can issue or correct a Form W-2. If you cannot get a copy of your Form W-2, you must complete form FTB 3525, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. See “Order Forms and Publications” or go to ftb.ca.gov/forms.

If you forget to send your Form(s) W-2 or other withholding forms with your income tax return, do not send them separately, or with another copy of your tax return. Wait until the FTB requests them from you.

Assembling Your Tax Return

Assemble your tax return in the order shown below.

Caution: Form 540 has six sides. When filing Form 540, you must send all six sides to the FTB.

Mailing Your Tax Return

If your tax return has an amount due, mail your tax return to the following address:

Mail

Franchise Tax Board
PO Box 942867
Sacramento, CA 94267-0001

If your tax return shows a refund or no amount due, mail your tax return to the following address:

Mail

Franchise Tax Board
PO Box 942840
Sacramento, CA 94240-0001

Nonrefundable Renter’s Credit Qualification Record

Tip: e-file and skip this information! The tax software product you use to e-file will help you find out if you qualify for this credit and will figure the correct amount of the credit automatically. Go to ftb.ca.gov to check your e-file options. You can claim the nonrefundable renter’s credit using CalFile.

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. Answer the questions below to see if you qualify. For purposes of California income tax, references to a spouse, husband, or wife also refer to a California Registered Domestic Partner (RDP), unless otherwise specified. When we use the initials RDP, they refer to both a California registered domestic “partner” and a California registered domestic “partnership,” as applicable. For more information on RDPs, get FTB Pub. 737. Do not mail this record. Keep with your tax records.

1. Were you a resident of California for the entire year in 2023?

   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 2023, and is otherwise qualified.

   YES.

   Go to question 2.

   NO.

   Stop here. File Form 540NR. See “Order Forms and Publications.”

2. Is your California adjusted gross income the amount on line 17:

   • $50,746 or less if single or married/RDP filing separately; or
   • $101,492 or less if married/RDP filing jointly, head of household, or qualifying surviving spouse/RDP?

   YES.

   Go to question 3.

   NO.

   Stop here. You do not qualify for this credit.

3. Did you pay rent, for at least half of 2023, on property (including a mobile home that you owned on rented land) in California, which was your principal residence?

   YES.

   Go to question 4.

   NO.

   Stop here. You do not qualify for this credit.

4. Can you be claimed as a dependent by a parent, foster parent, legal guardian, or any other person in 2023?

   NO.

   Go to question 6.

   YES.

   Go to question 5.

5. For more than half the year in 2023, did you live in the home of the person who can claim you as a dependent?

   NO.

   Go to question 6.

   YES.

   Stop here. You do not qualify for this credit.

6. Was the property you rented exempt from property tax in 2023?

   You do not qualify for this credit if, for more than half of the year, you rented property that was exempt from property taxes. Exempt property includes most government-owned buildings, church-owned parsonages, college dormitories, and military barracks. However, if you or your landlord paid possessory interest taxes for the property you rented, then you may claim this credit.

   NO.

   Go to question 7.

   YES.

   Stop here. You do not qualify for this credit.

7. Did you claim the homeowner’s property tax exemption anytime during 2023?

   You do not qualify for this credit if you or your spouse/RDP received a homeowner’s property tax exemption at any time during the year. However, if you lived apart from your spouse/RDP for the entire year and your spouse/RDP received a homeowner’s property tax exemption for a separate residence, then you may claim this credit if you are otherwise qualified.

   NO.

   Go to question 8.

   YES.

   If your filing status is single or married/RDP filing separately, stop here, you do not qualify for this credit. If your filing status is married/RDP filing jointly, go to question 9.

8. Were you single in 2023?

   YES.

   Go to question 11.

   NO.

   Go to question 9.

9. Did your spouse/RDP claim the homeowner’s property tax exemption anytime during 2023?

   You do not qualify for this credit if you or your spouse/RDP received a homeowner’s property tax exemption at any time during the year. However, if you lived apart from your spouse/RDP for the entire year and your spouse/RDP received a homeowner’s property tax exemption for a separate residence, then you may claim this credit if you are otherwise qualified.

   NO.

   Go to question 11.

   YES.

   If both you and your spouse/RDP claimed the homeowner’s property tax exemption, stop here, you do not qualify for this credit. Otherwise, go to question 10.

10. Did you and your spouse/RDP maintain separate residences for the entire year in 2023?

    YES.

    Go to question 11.

    NO.

    Stop here. You do not qualify for this credit.

11. If you are:

    • Single, enter $60 on Form 540, line 46.
    • Head of household or qualifying surviving spouse/RDP, enter $120 on Form 540, line 46.
    • Married/RDP filing separately: if you and your spouse/RDP lived in the same rental property and both qualify for this credit, one spouse/RDP may claim the full amount of the credit ($120), or each spouse/RDP may claim half the amount ($60 each). If you and your spouse/RDP lived apart for the entire year and you qualify for this credit, you may claim half the amount of the credit ($60). Enter your credit amount on Form 540, line 46.
    • Married/RDP filing jointly, enter $120 on Form 540, line 46. (Exception: If one spouse/RDP claimed the homeowner’s tax exemption and you lived apart from your spouse/RDP for the entire year, enter $60 on Form 540, line 46.)

Voluntary Contribution Fund Descriptions

Make voluntary contributions of $1 or more in whole dollar amounts to the funds listed below. To contribute to the California Seniors Special Fund, use the instructions for code 400 below. The amount you contribute either reduces your overpaid tax or increases your tax due. You may contribute only to the funds listed and cannot change the amount you contribute after you file your tax return. For more information, go to ftb.ca.gov and search for voluntary contributions.

Code 400, California Seniors Special Fund

If you and/or your spouse/RDP are 65 years of age or older as of January 1, 2024, and claim the Senior Exemption Credit, you may make a combined total contribution of up to $288 or $144 per spouse/RDP. Contributions made to this fund will be distributed to the Area Agency on Aging Councils of California (TACC) to provide advice on and sponsorship of Senior Citizens issues. Any excess contributions not required by TACC will be distributed to senior citizen service organizations throughout California for meals, adult day care, and transportation.

Code 401, Alzheimer’s Disease and Related Dementia Voluntary Tax Contribution Fund

Contributions will be used to provide grants to California scientists to study Alzheimer’s disease and related disorders. This research includes basic science, diagnosis, treatment, prevention, behavioral problems, and caregiving. With almost 600,000 Californians living with the disease and another 2 million providing care to a loved one with Alzheimer’s, our state is in the early stages of a major public health crisis. Your contribution will ensure that Alzheimer’s disease receives the attention, research, and resources it deserves. For more information go to cdph.ca.gov and search for Alzheimer.

Code 403, Rare and Endangered Species Preservation Voluntary Tax Contribution Program

Contributions will be used to help protect and conserve California’s many threatened and endangered species and the wild lands that they need to survive, for the enjoyment and benefit of you and future generations of Californians.

Code 405, California Breast Cancer Research Voluntary Tax Contribution Fund

Contributions will fund research toward preventing and curing breast cancer. Breast cancer is the most common cancer to strike women in California. It kills 4,000 California women each year. Contributions also fund research on prevention and better treatment, and keep doctors up-to-date on research progress. For more information about the research your contributions support, go to cbcrp.org. Your contribution can help make breast cancer a disease of the past.

Code 406, California Firefighters’ Memorial Voluntary Tax Contribution Fund

Contributions will be used for the repair and maintenance of the California Firefighters’ Memorial on the grounds of the State Capitol, ceremonies to honor the memory of fallen firefighters and to assist surviving loved ones, and for an informational guide detailing survivor benefits to assist the spouses/RDPs and children of fallen firefighters.

Code 407, Emergency Food for Families Voluntary Tax Contribution Fund

Contributions will be used to help local food banks feed California’s hungry. Your contribution will fund the purchase of much-needed food for delivery to food banks, pantries, and soup kitchens throughout the state. The State Department of Social Services will monitor its distribution to ensure the food is given to those most in need.

Code 408, California Peace Officer Memorial Foundation Voluntary Tax Contribution Fund

Contributions will be used to preserve the memory of California’s fallen peace officers and assist the families they left behind. Since statehood, over 1,300 courageous California peace officers have made the ultimate sacrifice while protecting law-abiding citizens. The non-profit charitable organization, California Peace Officers’ Memorial Foundation, has accepted the privilege and responsibility of maintaining a memorial for fallen officers on the State Capitol grounds. Each May, the Memorial Foundation conducts a dignified ceremony honoring fallen officers and their surviving families by offering moral support, crisis counseling, and financial support that includes academic scholarships for the children of those officers who have made the supreme sacrifice. On behalf of all of us and the law-abiding citizens of California, thank you for your participation.

Code 410, California Sea Otter Voluntary Tax Contribution Fund

The California Coastal Conservancy and the Department of Fish and Wildlife will each be allocated 50% of the contributions. Contributions allocated to the California Coastal Conservancy will be used for research, science, protection, projects, or programs related to the Federal Sea Otter Recovery Plan or improving the nearshore ocean ecosystem, including, program activities to reduce sea otter mortality. Contributions allocated to the Department of Fish and Wildlife will be used to establish a sea otter fund within the department’s index coding system for increased investigation, prevention, and enforcement action.

Code 413, California Cancer Research Voluntary Tax Contribution Fund

Contributions will be used to conduct research relating to the causes, detection, and prevention of cancer and to expand community-based education on cancer, and to provide prevention and awareness activities for communities that are disproportionately at risk or afflicted by cancer.

Code 422, School Supplies for Homeless Children Voluntary Tax Contribution Fund

Contributions will be used to provide school supplies and health-related products to homeless children.

Code 423, State Parks Protection Fund/Parks Pass Purchase

Contributions will be used for the protection and preservation of California’s state parks and for the cost of a Vehicle Day Use Annual Pass valid at most park units where day use fees are collected. The pass is not valid at off-highway vehicle units, or for camping, oversized vehicle, extra vehicle, per-person, or supplemental fees. If a taxpayer’s contribution equals or exceeds $195, the taxpayer will receive a single Vehicle Day Use Annual Pass. Amounts contributed in excess of the parks pass cost may be deducted as a charitable contribution for the year in which the voluntary contribution is made. Any contribution less than $195 will be treated as a voluntary contribution and may be deducted as a charitable contribution. For more information, go to parks.ca.gov/annualpass/ or email info@parks.ca.gov.

Code 424, Protect Our Coast and Oceans Voluntary Tax Contribution Fund

Contributions will be used to provide grants to community organizations working to protect, restore, and enhance the California coast and ocean. Contributions will support shoreline cleanups, habitat restoration, coastal access improvements, and ocean education programs.

Code 425, Keep Arts in Schools Voluntary Tax Contribution Fund

Contributions will be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade.

Code 438, California Senior Citizen Advocacy Voluntary Tax Contribution Fund

Contributions will be used to conduct the sessions of the California Senior Legislature and to support its ongoing activities on behalf of older persons.

Code 439, Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund

Contributions will be used to support the recovery and rehabilitation of injured, sick, or orphaned native wildlife, and conservation education.

Code 440, Rape Kit Backlog Voluntary Tax Contribution Fund

Contributions will be used for DNA testing in the processing of rape kits.

Code 444, Suicide Prevention Voluntary Tax Contribution Fund

Contributions will be used to support crisis centers located in the state that are active members of the National Suicide Prevention Lifeline, with priority given to those crisis centers located in rural and desert communities.

Code 445, Mental Health Crisis Prevention Voluntary Tax Contribution Fund

Contributions will be used to fund the Crisis Intervention Team program that trains peace officers to assist and engage safely with persons living with mental illness.

Credit Chart

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 you have an unused carryover available from prior years. If you are not required to complete Schedule P (540), get form FTB 3540 to figure your credit carryover to future years. For EZ, LAMBRA, MEA, or TTA credit carryovers, get form FTB 3805Z, form FTB 3807, form FTB 3808, or form FTB 3809. See “Where To Get Income Tax Forms and Publications.”

• Agricultural Products: 175
• Commercial Solar Electric System: 196
• Commercial Solar Energy: 181
• Donated Fresh Fruits or Vegetables: 224
• Employee Ridesharing: 194
• Employer Childcare Contribution: 190
• Employer Childcare Program: 189
• Employer Ridesharing:
  • Large employer: 191
  • Small employer: 192
  • Transit passes: 193
• Energy Conservation: 182
• Enterprise Zone Hiring: 176
• Enterprise Zone Sales or Use Tax: 176
• Environmental Tax: 218
• Farmworker Housing: 207
• Local Agency Military Base Recovery Area Hiring: 198
• Local Agency Military Base Recovery Area Sales or Use Tax: 198
• Low-Emission Vehicles: 160
• Main Street Small Business Tax: 240
• Main Street Small Business Tax II: 241
• Manufacturing Enhancement Area Hiring: 211
• New Jobs: 220
• Orphan Drug: 185
• Political Contributions: 184
• Recycling Equipment: 174
• Residential Rental & Farm Sales: 186
• Ridesharing: 171
• Salmon & Steelhead Trout Habitat Restoration: 200
• Solar Energy: 180
• Solar Pump: 179
• Targeted Tax Area Hiring: 210
• Targeted Tax Area Sales or Use Tax: 210
• Water Conservation: 178
• Young Infant: 161

Frequently Asked Questions

(Go to ftb.ca.gov for more frequently asked questions.)

1. What if I can’t file by April 15, 2024, and I think I owe tax?

   You must pay 100% of the amount you owe by April 15, 2024, to avoid interest and penalties. If you cannot file because you have not received all your federal Form(s) W-2, estimate the amount of tax you owe by completing form FTB 3519, Payment for Automatic Extension for Individuals. Mail it to the FTB with your payment by April 15, 2024, or pay online at ftb.ca.gov/pay. Then, when you receive all your federal Form(s) W-2, complete and mail your tax return by October 15, 2024 (you must use Form 540). Also, see "Interest and Penalties" section for information regarding a one-time timeliness penalty abatement.

2. I never received a federal Form W-2. What should I do?

   Automated Phone code: 204

   If all of your federal Forms W-2 were not received by January 31, 2024, contact your employer. Only an employer issues or corrects a federal Form W-2. For more information, call 800-338-0505, follow the recorded instructions and enter code 204 when instructed.

   If you cannot get a copy of your federal Form W-2, complete form FTB 3525. See “Where To Get Income Tax Forms and Publications.” For online wage and withhold information, go to ftb.ca.gov and login or register for MyFTB.

3. How can I get help?

   Throughout California more than 1,200 sites provide trained volunteers offering free help during the tax filing season to persons who need to file simple federal and state income tax returns. Many military bases also provide this service for members of the U.S. Armed Forces. Go to ftb.ca.gov and search for vita to find a list of participating locations or call the FTB at 800-852-5711 to find a location near you.

4. What do I do if I can’t pay what I owe with my 2023 tax return?

   Pay as much as possible when you file your tax return. If unable to pay your tax in full with your tax return, make a request for monthly payments. However, interest accrued and an underpayment penalty may be charged on the tax not paid by April 15, 2024, even if your request for monthly payments is approved. To make monthly payments, complete form FTB 3567, Installment Agreement Request, online or mail it to the address on the form. Do not mail it with your tax return.

   The Installment Agreement Request might not be processed and approved until after your tax return is processed, and you may receive a bill before you receive approval of your request.

   Automated Phone code: 949

   To order this form, go to ftb.ca.gov/forms or call 800-338-0505, follow the recorded instructions and enter code 949 when instructed.

   Automated Phone code: 610

   For information on how to pay by credit card, go to ftb.ca.gov/pay, or call 800-338-0505, follow the recorded instructions and enter code 610 when instructed.

5. Is direct deposit safe?

   Direct deposit is safe and convenient. To have your refund directly deposited into your bank account, fill in the account information on Form 540, Side 5, line 116 and line 117. Fill in the routing and account numbers and indicate the account type.

6. How can I check on the status of my refund?

   Go to ftb.ca.gov and search for refund status. You will need your social security number (SSN) or individual taxpayer identification number (ITIN) and the refund amount from your tax return.

   You can also call our automated phone service. See "Automated Phone Service" for more information.

7. I discovered an error on my tax return. What should I do?

   Automated Phone code: 908

   If you discover that you made an error on your California income tax return after you filed it (paper or e-filed), file an amended Form 540 and attach Schedule X to correct your previously filed tax return. Get Schedule X at ftb.ca.gov/forms or call 800-338-0505, follow the recorded instructions and enter code 908 when instructed.

8. The IRS made changes to my federal tax return. What should I do?

   If your federal income tax return is examined and changed by the IRS and you owe additional tax, report these changes to the FTB within six months of the date of the final federal determination. If the changes the IRS made result in a refund due for California, claim a refund within two years of the date of the final federal determination. File an amended Form 540 and Schedule X to correct your previously filed income tax return and mail them to the following address, as applicable:

   Mail

   Without payment
   Franchise Tax Board
   PO Box 942840
   Sacramento, CA 94240-0001

   With payment
   Franchise Tax Board
   PO Box 942867
   Sacramento, CA 94267-0001

   Or send a copy of the federal changes to:

   Mail

   ATTN RAR/VOL MS F310
   Franchise Tax Board
   PO Box 1998
   Rancho Cordova, CA 95741-1998

   Or fax the information to 916-843-2269.

   If you have a question relating to the IRS audit adjustments, call 916-845-4028.

   For general tax information or questions, call 800-852-5711.

   Regardless of which method you use to notify the FTB, you must include a copy of the final federal determination along with all data and schedules on which the federal adjustment was based. Get FTB Pub. 1008, Federal Tax Adjustments and Your Notification Responsibilities to California, for more information. See “Order Forms and Publications.”

   File an amended Form 540 and Schedule X only if the change affected your California tax liability.

9. How long should I keep my tax information?

   Requests for information regarding your California income tax return usually occurs within the California statute of limitations period, which is usually the later of four years from the due date of the tax return or four years from the file date of the tax return. (Exception: An extended statute of limitations period applies for California or federal tax returns related or subject to a federal audit.)

   Keep a copy of your tax return and the records that verify the income, deductions, adjustments, or credits reported on your return. Some records should be kept longer. For example, keep property records as long as needed to figure the basis of the property or records needed to verify carryover items (i.e., net operating losses, capital losses, passive losses, casualty losses, etc.) or records needed to track deferred gains on a 1031 exchange.

10. I will be moving after I file my tax return. How do I notify the FTB of my new address?

    Go to ftb.ca.gov and login or register for MyFTB or call 800-852-5711, and follow the recorded instructions to report a change of address. You may also use form FTB 3533, Change of Address for Individuals. This form is available at ftb.ca.gov/forms. If you change your address online or by phone, you do not need to file form FTB 3533.

    After filing your tax return, report a change of address to us for up to four years, especially if you leave the state and no longer have a requirement to file a California tax return.

11. Are all domestic partners required to file joint or separate tax returns?

    No, only domestic partners who are registered with the California Secretary of State are required to file using the married/RDP filing jointly or married/RDP filing separately filing status.

Owe Money? Web Pay lets you pay online, so you can schedule it and forget it! Go to ftb.ca.gov/pay for more information.

Additional Information

California Use Tax General Information

The use tax has been in effect in California since July 1, 1935. It applies to purchases of merchandise for use in California from out-of-state sellers and is similar to the sales tax paid on purchases you make in California. If you have not already paid all use tax due to the California Department of Tax and Fee Administration, you may be able to report and pay the use tax due on your state income tax return. See the information below and the instructions for Line 91 of your income tax return.

In general, you must pay California use tax on purchases of merchandise for use in California made from out-of-state sellers, for example, by telephone, over the Internet, by mail, or in person.

You must pay California use tax on taxable items if:

• The seller does not collect California sales or use tax, and
• You use, gift, store, or consume the item in this state.

Example: You live in California and purchase a dining table from a company in North Carolina. The company ships the table from North Carolina to your home for your use and does not charge California sales or use tax. You owe use tax on the purchase.

However, not all purchases require you to pay use tax. For example, you would include purchases of clothing, but not exempt purchases of food products or prescription medicine.

For more information on nontaxable and exempt purchases, you may refer to Publication 61, Sales and Use Taxes: Tax Expenditures, on the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov.

For information about California use tax, please refer to the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov and type “Find Information About Use Tax” in the search bar.

Complete the Use Tax Worksheet or use the Use Tax Lookup Table, to calculate the amount due.

Extensions to File

If you request an extension to file your income tax return, wait until you file your tax return to report your purchases subject to use tax and make your use tax payment.

Interest, Penalties and Fees

Failure to timely report and pay the use tax due may result in the assessment of interest, penalties, and fees.

Application of Payments

For purchases made during taxable years starting on or after January 1, 2015, payments and credits reported on an income tax return will be applied first to the use tax liability, instead of income tax liabilities, penalties, and interest.

Changes in Use Tax Reported

Do not file an Amended Income Tax Return to revise the use tax previously reported. If you have changes to the amount of use tax previously reported on the original return, contact the California Department of Tax and Fee Administration.

For assistance with your use tax questions, go to the California Department of Tax and Fee Administration’s website at cdtfa.ca.gov or call their Customer Service Center at 800-400-7115 (CRS:711) (for hearing and speech disabilities). For California income tax information, contact the Franchise Tax Board at ftb.ca.gov.

Collection Fees

The FTB is required to assess collection and filing enforcement cost recovery fees on delinquent accounts.

Deceased Taxpayers

A final return must be filed for a person who died in 2023 if a tax return normally would be required. The administrator or executor, if one is appointed, or beneficiary must file the tax return. Print “deceased” and the date of death next to the taxpayer’s name at the top of the tax return.

If you are a surviving spouse/RDP and no administrator or executor has been appointed, file a joint tax return if you did not remarry or enter into another registered domestic partnership during 2023. Indicate next to your signature that you are the surviving spouse/RDP.

You may also file a joint tax return with an administrator or executor acting on behalf of the deceased taxpayer.

If you file a tax return and claim a refund due to a deceased taxpayer, you are certifying under penalty of perjury either that you are the legal representative of the deceased taxpayer’s estate (in this case, attach certified copies of the letters of administration or letters testamentary) or that you are entitled to the refund as the deceased’s surviving relative or sole beneficiary under the provisions of the California Probate Code. You must also attach a copy of federal Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, and a copy of the death certificate when you file a tax return and claim a refund due.

Innocent Joint Filer Relief

If you file a joint tax return, both you and your spouse/RDP are generally responsible for paying the tax and any interest or penalties due on the tax return. However, you may qualify for relief of payment on all or part of the balance as an innocent joint filer. For more information, get form FTB 705, Innocent Joint Filer Relief Request, at ftb.ca.gov/forms or call 916-845-7072, Monday – Friday between 8 a.m. to 5 p.m. except holidays.

Military Personnel

If you are a member of the military and need additional information on how to file your tax return, get FTB Pub. 1032. See “Order Forms and Publications.”

Requesting a Copy of Your Tax Return

The FTB keeps personal income tax returns for three and one-half years from the original due date. To get a copy of your tax return, write a letter or complete form FTB 3516, Request for Copy of Personal Income or Fiduciary Tax Return. In most cases, a $20 fee is charged for each taxable year you request. However, no charge applies for victims of a designated California or federal disaster; or if you request copies from a field office that assisted you in completing your tax return. See “Where To Get Tax Forms and Publications” to download or order form FTB 3516.

Local Benefits

You cannot deduct the amounts you pay for local benefits that apply to property in a limited area (construction of streets, sidewalks, or water and sewer systems). You must look at your real estate tax bill to determine if any nondeductible itemized charges are included in your bill. For more information, get federal Pub. 17, Your Federal Income Tax – For Individuals, Chapter 11.

Vehicle License Fees for Federal Schedule A

On your federal Schedule A (Form 1040), Itemized Deductions, you may deduct the California motor vehicle license fee listed on your Vehicle Registration Billing Notice from the Department of Motor Vehicles. The other fees listed on your billing notice such as registration fee, weight fee, and county fees are not deductible.

Voting Is Everybody’s Business

You may register to vote if you meet these requirements:

• You are a United States citizen.
• You are a resident of California.
• You will be 18 years old by the date of the next election.
• You are not in prison or on parole for the conviction of a felony.

You need to re-register every time you move, change your name, or wish to change political parties. In order to vote in an election, you must be registered to vote at least 15 days before that election. If you need to get a Voter Registration Card, call the California Secretary of State’s Voter Hotline at 800-345-VOTE or go to sos.ca.gov.

To register to vote in California, you must be:

• A United States citizen and a resident of California,
• 18 years old or older on Election Day,
• Not currently in state or federal prison or on parole for the conviction of a felony, and
• Not currently found mentally incompetent to vote by a court.

Pre-register at 16. Vote at 18. Voter pre-registration is now available for 16 and 17 year olds who otherwise meet the voter registration eligibility requirements. California youth who pre-register to vote will have their registration become active once they turn 18 years old.

If you wish to receive a paper Voter Registration or Pre-Registration Application, call the California Secretary of State’s Voter Hotline at 800-345-VOTE or simply register online at RegisterToVote.ca.gov. For more information about how and when to register to vote, visit sos.ca.gov/elections.

It’s Your Right … Register and Vote

If You File Electronically

If you e-file your tax return, make sure all the amounts entered on the paper copy of your California return are correct before you sign form FTB 8453, California e-file Return Authorization for Individuals, or form FTB 8879, California e-file Signature Authorization for Individuals. If you are requesting direct deposit of a refund, make sure your account and routing information is correct. Your tax return can be transmitted to the FTB by your preparer or electronic e-file service only after you sign form FTB 8453 or form FTB 8879. The preparer or electronic e-file service must provide you with:

• A copy of form FTB 8453 or FTB 8879.
• Any original California Forms 592-B, 593, and federal Forms W-2, 1099-G, and other Form(s) 1099 that you provided.
• A paper copy of your California tax return showing the data transmitted to the FTB.

You cannot retransmit an e-filed tax return once we have accepted the original. You can correct an error by filing an amended Form 540 and Schedule X to correct your previously filed tax return.

Instructions for Filing a 2023 Amended Return

Important Information

Protective Claim – If you are filing a claim for refund for a taxable year where an audit is being conducted by another state’s taxing agency, litigation is pending or where a final determination by the IRS is pending, check box a for “Protective claim for refund” on Schedule X, Part II, line 1. Specify the pending litigation or reference to the federal determination on Part II, line 2 so we can properly process your claim.

Do not attach your previously filed return to your amended return.

Do not file an amended return to correct your SSN, name, or address, instead, call or write to us. See “Contacting the Franchise Tax Board” for more information.

Use Tax – Do not amend your return to correct a use tax error reported on your original tax return. Enter the amount from your original return. The California Department of Tax and Fee Administration (CDTFA) administers this tax. Refer all questions or requests relating to use tax to the CDTFA at cdtfa.ca.gov or call 800-400-7115.

Amount You Want Applied To Your 2024 Estimated Tax – Enter zero on amended Form 540, line 98 and get the instructions for Schedule X for the actual amount you want applied to your 2024 estimated tax.

Voluntary Contributions – You cannot amend voluntary contributions. Enter the amount from your original return.

Direct Deposit – You can now use direct deposit on your amended return.

When filing an amended return, only complete the amended Form 540 through line 115. Next, complete Schedule X. The amount from Schedule X, line 11 is your additional refund amount. This amount will be carried over to your amended Form 540 and will be entered on line 116 and line 117. The total of the amended Form 540, line 116 and line 117 must equal the total amount of your refund on Schedule X, line 11. If the total of the amended Form 540, line 116 and line 117 does not equal Schedule X, line 11, the FTB will issue a paper check.

Dependent Exemption Credit with No ID – For taxable years beginning on or after January 1, 2018, taxpayers claiming a dependent exemption credit for a dependent who is ineligible for an SSN and a federal ITIN may provide alternative information to the FTB to identify the dependent. To claim the dependent exemption credit, taxpayers complete form FTB 3568, attach the form and required documentation to their tax return, and write “no id” in the SSN field of line 10, Dependents, on Form 540. For each dependent being claimed that does not have an SSN and an ITIN, a form FTB 3568 must be provided along with supporting documentation.

If you are amending a return beginning with taxable year 2018 to claim the dependent exemption credit, complete an amended Form 540, and write “no id” in the SSN field on the Dependents line, and attach Schedule X. To complete Schedule X, check box m for “Other” on Part II, line 1, and write the explanation “Claim dependent exemption credit with no id and form FTB 3568 is attached” on Part II, line 2. Make sure to attach form FTB 3568 and the required supporting documents in addition to the amended return and Schedule X. If you do not claim the dependent exemption credit on the original 2023 tax return, you may amend the 2023 tax return following the same procedures used to amend your previous year amended tax returns beginning with taxable year 2018. If claiming a refund, taxpayers must amend their returns within the statute of limitations. For more information, get FTB Notice 2021-01.

Purpose

Use Form 540 to amend your original or previously filed California resident income tax return. If the FTB adjusted your return, you should use the amounts as adjusted by the FTB. Check the box at the top of Form 540 indicating AMENDED return and follow the instructions. Submit the completed amended Form 540 and Schedule X along with all required schedules and supporting forms.

When to File

Generally, if you filed federal Form 1040-X, Amended U.S. Individual Income Tax Return, file an amended California tax return within six months unless the changes do not affect your California tax liability. File an amended return only after you have filed your original or previously filed California tax return.

California Statute of Limitations

Original tax return was filed on or before April 15th: If you are making a claim for refund, file an amended tax return within four years from the original due date of the tax return or within one year from the date of overpayment, whichever period expires later.

Original tax return was filed within the extension period (April 15th – October 15th): If you are making a claim for refund, file an amended tax return within four years from the date the original tax return was filed or within one year from the date of overpayment, whichever period expires later.

Original tax return was filed after October 15th: If you are making a claim for refund, file an amended tax return within four years from the original due date of the tax return (April 15th) or within one year from the date of overpayment, whichever period expires later.

If you are filing your amended tax return after the normal statute of limitation period (four years after the due date of the original tax return), attach a statement explaining why the normal statute of limitations does not apply.

If you are filing your amended return in response to a billing notice you received, you will continue to receive billing notices until your amended tax return is accepted. You may file an informal claim for refund even though the full amount due including tax, penalty, and interest has not yet been paid. After the full amount due has been paid, you have the right to appeal to the Office of Tax Appeals at ota.ca.gov or to file suit in court if your claim for refund is disallowed.

To file an informal claim for refund, check box l for “Informal claim” on Schedule X, Part II, line 1 and mail the claim to:

Mail

Franchise Tax Board
PO Box 942840
Sacramento, CA 94240-0040

Financially Disabled Taxpayers

The statute of limitations for filing claims for refunds is suspended during periods when a taxpayer is “financially disabled.” You are considered “financially disabled” when you are unable to manage your financial affairs due to a medically determinable physical or mental impairment that is deemed to be either a terminal impairment or is expected to last for a continuous period of not less than 12 months. You are not considered “financially disabled” during any period that your spouse/RDP or any other person is legally authorized to act on your behalf on financial matters. For more information, get form FTB 1564, Financially Disabled – Suspension of the Statute of Limitations.

Federal Notices

If you were notified of an error on your federal income tax return that changed your AGI, you may need to amend your California income tax return for that year.

If the IRS examines and changes your federal income tax return, and you owe additional tax, report these changes to the FTB within six months. You do not need to inform the FTB if the changes do not increase your California tax liability. If the changes made by the IRS result in a refund due, you must file a claim for refund within two years. Use an amended Form 540 and Schedule X to make any changes to your California income tax returns previously filed.

Include a copy of the final federal determination, along with all underlying data and schedules that explain or support the federal adjustment.

Note: Most penalties assessed by the IRS also apply under California law. If you are including penalties in a payment with your amended tax return, see Schedule X, line 8a instructions.

Children With Investment Income

If your child was required to file form FTB 3800, Tax Computation for Certain Children with Unearned Income, and your taxable income has changed, review your child’s tax return to see if you need to file an amended tax return. Get form FTB 3800 for more information.

Contacting the Franchise Tax Board

If you have not received a refund within six months of filing your amended return, do not file a duplicate amended return for the same year. For information on the status of your refund, you may write to:

Mail

Franchise Tax Board
PO Box 942840
Sacramento, CA 94240-0040

For telephone assistance, see General Phone Service.

Filing Status

Your filing status for California must be the same as the filing status you used on your federal income tax return, unless you are in an RDP. If you are an RDP and file single for federal, you must file married/RDP filing jointly or married/RDP filing separately for California. If you entered into a same-sex marriage, your filing status for California would generally be the same as the filing status that was used for federal. If you are a same-sex married individual or an RDP and file head of household for federal, you may file head of household for California only if you meet the requirements to be considered unmarried or considered not in a registered domestic partnership.

Exception for Filing a Separate Tax Return – A married couple who filed a joint federal tax return may file separate state tax returns if either spouse was either of the following:

• An active member of the United States armed forces (or any auxiliary military branch) during the year being amended.
• A nonresident for the entire year and had no income from California sources during the year being amended.

Changing Your Filing Status – If you changed your filing status on your federal amended tax return, also change your filing status for California unless you meet one of the exceptions listed above.

Married/RDP Filing Jointly to Married/RDP Filing Separately – You cannot change from married/RDP filing jointly to married/RDP filing separately after the due date of the tax return.

Exception: A married couple who meets the “Exception for Filing a Separate Tax Return” shown above may change from joint to separate tax returns after the due date of the tax return.

Filing Separate Tax Returns to Married/RDP Filing Jointly – If you or your spouse/RDP (or both of you) filed a separate tax return, you generally can change to a joint tax return any time within four years from the original due date of the separate tax return(s). To change to a joint tax return, you and your spouse/RDP must have been legally married or in an RDP on the last day of the taxable year.

To amend from separate tax returns to a joint tax return, follow Form 540 instructions to complete only one amended tax return. Both you and your spouse/RDP must sign the amended joint tax return.

2023 California Tax Rate Schedules

Tip: To e-file and eliminate the math, go to ftb.ca.gov. To figure your tax online, go to ftb.ca.gov/tax-rates.

Use only if your taxable income on Form 540, line 19 is more than $100,000. If $100,000 or less, use the Tax Table.

Schedule X

Schedule Y

Schedule Z

How to Figure Tax Using the 2023 California Tax Rate Schedules

Example: Chris and Pat Smith are filing a joint tax return using Form 540. Their taxable income on Form 540, line 19 is $125,000.

Step 1:

Using Schedule Y, they find the taxable income range that includes their taxable income of $125,000.

Step 2:

They subtract the amount at the beginning of their range from their taxable income.

Example: $125,000 − 108,162 = $16,838

Step 3:

They multiply the result from Step 2 by the percentage for their range.

Example: $16,838 × .08 = $1,347.04

Step 4:

They round the amount from Step 3 to two decimals (if necessary) and add it to the tax amount for their income range. After rounding the result, they will enter $5,083 on Form 540, line 31.

Example: $3,735.76 + 1,347.04 = $5,082.80

How To Get California Tax Information

Where To Get Income Tax Forms and Publications

By Internet – You can download, view, and print California income tax forms and publications at ftb.ca.gov/forms or you may have these forms and publications mailed to you. Many of our most frequently used forms may be filed electronically, printed out for submission, and saved for record keeping.

By phone – To order California tax forms and publications:

• Refer to the Order Forms and Publications list and find the code number for the form you want to order.
• Call 800-338-0505.
• Follow the recorded instructions.
• Enter the three-digit form code when you are instructed.

Allow two weeks to receive your order. If you live outside California, allow three weeks to receive your order.

In person – Many post offices and libraries provide free California tax booklets during the filing season.

Employees at libraries and post offices cannot provide tax information or assistance.

By mail – Write to:

Mail

Tax Forms Request Unit MS D120
Franchise Tax Board
PO Box 307
Rancho Cordova, CA 95741-0307

Letters

If you write to us, be sure your letter includes your social security number or individual taxpayer identification number and your daytime and evening telephone numbers. Send your letter to:

Mail

Franchise Tax Board
PO Box 942840
Sacramento, CA 94240-0040

We will respond to your letter within 10 weeks. In some cases, we may call you to respond to your inquiry, or ask you for additional information. Do not attach correspondence to your tax return unless the correspondence relates to an item on the return.

Your Rights As A Taxpayer

The FTB’s goals include making certain that your rights are protected so that you have the highest confidence in the integrity, efficiency, and fairness of our state tax system. For more information, get FTB 4058, California Taxpayers’ Bill of Rights – Information for Taxpayers. See “Where To Get Income Tax Forms and Publications.”

Franchise Tax Board Privacy Notice on Collection

The privacy and security of your personal information is of the utmost importance to us. We want you to have the highest confidence in the integrity, efficiency, and fairness of our state tax system.

Your Rights and Responsibilities – You have a right to know what types of information we gather, how we use it, and to whom we may provide it. Information collected is subject to the California Information Practices Act, Civil Code section 1798-1798.78, except as provided in R&TC Section 19570.

If you meet certain requirements, you must file a valid tax return and related documents. You must provide your social security number or other identifying number on your tax return and related documents for identification. (R&TC Sections 18501, 18621,and 18624)

Reasons for Information Requests – We may request additional information to verify and collect the correct amount of tax. (R&TC Section 19504) You must provide all requested information, unless indicated as “optional.”

Consequences of Noncompliance – We charge penalties and interest if you:

• Meet income requirements but do not file a valid tax return.
• Do not provide the information we request.
• Provide false information.

We may also disallow your claimed exemptions, exclusions, credits, deductions, or adjustments. If you provide false information, you may be subject to civil penalties and criminal prosecution. Noncompliance can increase your tax liability or delay or reduce any tax refund.

Disclosure of Information – We will not disclose your personal information, unless authorized by law. We may disclose your tax information to:

• The Internal Revenue Service.
• Other states’ income tax officials.
• California government agencies and officials.
• Third parties to determine or collect your tax liabilities.
• Your authorized representative(s).

If you owe taxes, we may disclose your balance due as part of our collection process to: employers, financial institutions, county recorders, process agents, or other asset holders.

Responsibility for the Records – The director of the Processing Services Bureau maintains FTB’s records. You may review your records and bring any inaccuracies to our attention. You can obtain information about your records by:

Phone

800-852-5711 (within the United States)
916-845-6500 (outside of the United States)

Mail

Disclosure Officer MS A181
Franchise Tax Board
PO Box 1468
Sacramento, CA 95812-1468

To learn more about our Privacy Policy Statement, go to ftb.ca.gov/privacy.

Automated Phone Service

(Keep This Information For Future Use)

Automated Phone Service

Use our automated phone service to get recorded answers to many of your questions about California taxes and to order current year personal income tax forms and publications. You can also:

• Get current year tax refund information.
• Get balance due and payment information.

Have paper and pencil ready to take notes.

Telephone:

800-338-0505 from within the United States
916-845-6500 from outside the United States

Answers To Tax Questions

Call our automated phone service, follow the recorded instructions and enter the 3-digit code.

Code

Filing Assistance

100

Do I need to file a tax return?

111

Which form should I use?

112

How do I file electronically and get a fast refund?

201

How can I get an extension to file?

203

What is the nonrefundable renter’s credit and how do I qualify?

204

I never received a federal Form W-2. What do I do?

205

I have no withholding taken out. What do I do?

206

Do I have to attach a copy of my federal tax return?

209

I lived in California for part of the year. Do I have to file a tax return?

210

I did not live in California. Do I have to file a tax return?

215

Who qualifies me to use the head of household filing status?

222

How much can I deduct for vehicle license fees?

Penalties

403

What is the estimated tax penalty rate?

Notices And Bills

503

How do I file a protest against a Notice of Proposed Assessment?

506

How can I get information about my Form 1099-G?

Tax For Children

601

Can my child take a personal exemption credit when I claim her or him as a dependent on my tax return?

Miscellaneous

611

What address do I send my payment to?

619

How do I report a change of address?

Order Forms and Publications

If your current address is on file, you can order California tax forms and publications. Call our automated phone service, follow the recorded instructions and enter the 3-digit code.

Code

California Tax Forms and Publications

900

California Resident Income Tax Booklet: Form 540, California Resident Income Tax Return

965

Form 540 2EZ Tax Booklet

903

Schedule CA (540), California Adjustments – Residents, FTB 3885A, Depreciation and Amortization Adjustments, and Schedule D, California Capital Gain or Loss Adjustment

969

Large Print Resident Booklet

907

Form 540-ES, Estimated Tax for Individuals

908

Schedule X, California Explanation of Amended Return Changes

909

Schedule D-1, Sales of Business Property

910

Schedule G-1, Tax on Lump-Sum Distributions

911

Schedule P (540), Alternative Minimum Tax and Credit Limitations – Residents

913

Schedule S, Other State Tax Credit

914

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

917

Schedule CA (540NR), California Adjustments – Nonresidents or Part-Year Residents

918

Schedule P (540NR), Alternative Minimum Tax and Credit Limitations – Nonresidents or Part-Year Residents

948

FTB 1131 EN-SP, Franchise Tax Board Privacy Notice on Collection – Aviso de Privacidad del Franchise Tax Board sobre la Recaudación

932

FTB 3506, Child and Dependent Care Expenses Credit

938

FTB 3514, California Earned Income Tax Credit Booklet

937

FTB 3516, Request for Copy of Personal Income or Fiduciary Tax Return

921

FTB 3519, Payment for Automatic Extension for Individuals

922

FTB 3525, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

923

FTB 3526, Investment Interest Expense Deduction

939

FTB 3532, Head of Household Filing Status Schedule

940

FTB 3540, Credit Carryover and Recapture Summary

949

FTB 3567, Installment Agreement Request

924

FTB 3800, Tax Computation for Certain Children with Unearned Income

929

FTB 3801, Passive Activity Loss Limitations

925

FTB 3805E, Installment Sale Income

928

FTB 3805P, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts

926

FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations – Individuals, Estates, and Trusts

943

FTB 4058, California Taxpayers’ Bill of Rights – Information for Taxpayers

927

FTB 5805, Underpayment of Estimated Tax by Individuals and Fiduciaries

919

FTB Pub. 1001, Supplemental Guidelines to California Adjustments

920

FTB Pub. 1005, Pension and Annuity Guidelines

945

FTB Pub. 1006, California Tax Forms and Related Federal Forms

946

FTB Pub. 1008, Federal Tax Adjustments and Your Notification Responsibilities to California

941

FTB Pub. 1031, Guidelines for Determining Resident Status

942

FTB Pub. 1032, Tax Information for Military Personnel

934

FTB Pub. 1540, Tax Information for Head of Household Filing Status

Current Year Refund Information

If you file by mail, wait at least 8 weeks after you file your tax return before you call to find out about your refund. You need your social security number, the numbers in your street address, box number, route number, or PMB number, and your ZIP code to use this service.

Balance Due and Payment Information

Wait at least 45 days from the date you mailed your payment before you call to verify receipt. You need your social security number, the numbers in your street address, box number, route number, or PMB number, and your ZIP code to use this service.

General Phone Service

Telephone assistance is available year-round from 8 a.m. until 5 p.m. Monday through Friday, except holidays. Hours are subject to change.

Telephone:

800-852-5711 from within the United States
916-845-6500 from outside the United States
800-829-1040 for federal tax questions, call the IRS

California Relay Service:

711 or 800-735-2929 for persons with hearing or speaking limitations

Large-print forms and instructions – The Resident Booklet is available in large print upon request. See “Order Forms and Publications” or "Where To Get Income Tax Forms and Publications."

Asistencia En Español

Asistencia telefónica está disponible durante todo el año desde las 8 a.m. hasta las 5 p.m. de lunes a viernes, excepto días feriados. Las horas están sujetas a cambios.

Teléfono:

800-852-5711 dentro de los Estados Unidos
916-845-6500 fuera de los Estados Unidos
800-829-1040 para preguntas sobre impuestos federales, llame al IRS

Servicio de Retransmisión de California:

711 o 800-735-2929 para personas con limitaciones auditivas o del habla