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Screen CACr - California Current Year Credits (1040)

Overview

Use this screen to complete the following:
  • Schedule P (540), Alternative Minimum Tax and Credit Limitations - Residents or Schedule P (540NR), Alternative Minimum Tax and Credit Limitations - Nonresidents or Part-Year Residents
  • Form 3540, Credit Carryover Summary
  • Form 3506, Child and Dependent Care Expenses Credit
If information transferred from UltraTax/1040 does not require additional data or coding, UltraTax/1040-CA shows the information on the form only, not in the input screen.
UltraTax CS prints Schedule P (540) if credits or exemptions are limited on Schedule P (540), alternative minimum tax is due, or there are more than three credits claimed and at least one credit is not reflected on Form 3540.
UltraTax CS uses this data together with information from Form 3510 to complete Schedule P (540), Part III, or Schedule P (540NR), Part III. UltraTax CS takes credits in credit number order within each section on Schedule P.

Form 3506 - Child and Dependent Care

Use this section to enter additional information to calculate Form 3506, Child and Dependent Care Expenses Credit. Calculation of the form is automatically suppressed when the federal AGI is greater than the current-year limit.
For part-year and nonresident returns, federal AGI is adjusted per state law to exclude nontaxable military wages.
For Registered Domestic Partner returns, federal AGI is adjusted per state law to be the combined federal AGI from the two separately filed returns.
Electronic filing requires the federal AGI on line 13 of Form 540 or 540NR to be less than the current-year limit. Returns that include an adjusted federal AGI allowing the credit when line 13 is greater than the current-year limit must be paper filed.
UltraTax CS automatically includes income from interest, dividends, Social Security, pensions, IRA distributions, and unemployment in the calculation of Form 3506, Part I. Use the statement dialog attached to this field to list the source and amount of any other money received in the current year that is not included in earned income but that was used to support the household.
Provider information in this statement dialog transfers from data entry in the federal Cr Screen. Information transfers only for non-LAFCP expenses for providers with "CA" address (location). Only those expenses incurred in the current year for care provided in California qualify for the credit. Thus, regardless of data entry in the
Provider's State
 column in the federal Cr Screen, only those providers with
CA
 entered in the
State
 (location) column transfer to this statement dialog. Fields are available to enter state-specific information. If any California data differs from the federal data, enter the state data in the appropriate column. The new data displays in black and subsequent federal to state transfers do not overwrite this data.
UltraTax CS includes the Provider's address entered on the federal Cr Screen as part of the information that transfers to this statement dialog. Form 3506 defaults to using this address for both the mailing address of the provider and the address for where the care was provided. California Franchise Tax Board does not allow the use of P.O. Box or Private Mail Box as part of the address for where the care was provided. If the column for
Provider's Street Address
 includes a P.O. Box or PMB, or if the location of where the care was provided differs from the provider's mailing address, use the
Location, if different
 columns to enter the actual physical location (address) of where the care was provided. UltraTax displays a diagnostic message when the address for where the care was provided reported on Form 3506 includes a P.O. Box or Private Mail Box.
If a non-CA location is entered in the
State
 column at the federal level, the information does not transfer to this statement dialog. If the care actually took place in California, you may enter the information in this statement dialog. Include the actual CA location of where the care took place in the
Location, if different
 columns in order to report the information on Form 3506.
Electronic filing specifications for IRS Form 2441 allow the text "See W-2" in lieu of the actual provider's mailing address when applicable. California Franchise Tax Board also allows "See W-2" for the mailing address on California Form 3506, Part II, line 1b. However, FTB still requires an entry on Form 3506, Part II, lin e1f for the address (street, city, state, ZIP code) of where the care was provided.
If a CA location is entered in the
State
 column at the federal level and transfers to this statement dialog but the care did not take place in California, enter the actual non-CA location of where the care took place in the
Location, if different
 columns in order to exclude the information from Form 3506.
The Franchise Tax Board also requires the phone number of the provider on the return and may call the provider to verify the provider information. The phone number may be entered in the federal Cr Screen using the
State Use
 field to enter the phone number and the state postal code of
CA
. Enter the phone number, including area code, separated with hyphens.
Dependent and nondependent information in this statement dialog transfers from the federal 1040 and Cr Screens. Complete information may be entered in the statement dialogs when the taxpayer does not qualify for the federal child care credit, but does qualify for the California credit. If any California data differs from the federal data, delete the data or enter the state data in the appropriate column. The new data displays in black and subsequent federal to state transfers do not overwrite this data. UltraTax CS defaults to 100 percent in the
% Physical Custody
 column. If the taxpayer shared custody of the qualifying person(s), enter the percentage of time the taxpayer had physical custody if less than 100 percent. UltraTax CS does not limit the calculation of Form 3506 based on the percentage of physical custody entered. Enter
0
 (zero) in the
Qualified Expenses
 column if information for a dependent transferred to this screen but does not qualify for the California credit.
Use this field to force an amount different than the federal force or calculated amount for the taxpayer on Form 3506, Page 2, Earned income.
Use this field to force an amount different than the federal force or calculated amount for the spouse on Form 3506, Page 2, Earned income.
Use this field to force an amount different than the federal force or calculated amount for the taxpayer on Form 3506, Page 1 earned income.
Use this field to force an amount different than the federal force or calculated amount for the spouse on Form 3506, Page 1 earned income.
Prior-year employer benefits default to the amount entered in the federal Cr Screen. Use this field to enter an amount if different for the taxpayer for Form 3506, Page 2.
Prior-year employer benefits default to the amount entered in the federal Cr Screen. Use this field to enter an amount if different for the spouse for Form 3506, Page 2.
Use these fields only when the taxpayer is not claiming federal Form 2441 credit but does qualify for the California Form 3506 credit.

Offset Excess Tax, No Carryover

Use this section to enter current-year additions and suspended passive activity amounts with respect to credits that offset excess tax and have no carryover provisions. Credit amounts transfer to Schedule P (540), Section A1.
Enter the Prison Inmate Labor credit calculated on Form 3507. The credit form is available in the noncalculating section of UltraTax CS to complete as needed. A completed, noncalculating form that is required in an electronically filed return is included in the electronic file.

Offset Excess Tax, Limited Carryover

Use this section to enter current-year additions with respect to credits that offset excess tax and have limited carryover provisions. Credit amounts transfer to Schedule P (540) or P (540NR), Section A2.
Enter the credit calculated as available to Schedule P (540) or P (540NR) from Form 3807. Form 3807 is available as a noncalculating form in the Non Calculating folder. Credit carryovers entered on the noncalculating Form 3807, column (g) in the prior year proforma'd to the noncalculating Form 3807 in the prior-year carryover field, column (c).
Use these fields to enter various credits eligible for Schedule P (540) or P (540NR), Section A2. The credit forms are available in the noncalculating section of UltraTax CS to complete as needed. Any completed, noncalculating forms that are required in an electronically filed return are included in the electronic file.
This field is intended only for 2021 Form 540/540NR returns which have already been filed and which claimed the Code 242 Pass-Through Entity Elective Tax Credit on Schedule P(540/540NR), Section A2 under the original tax legislation.
Taxpayers who already filed 2021 Form 540 or Form 540NR and claimed the credit have the option of amending the 2021 return if use of the credit was restricted and a credit carryforward was generated due to tentative minimum tax limitations under the original legislation.
The revised legislation allows the credit to offset tentative minimum tax via Schedule P(540/540NR), Section B2, further reducing the current year tax liability and also reducing any credit carryforward to next year.
If the taxpayer does not wish to amend the 2021 return, they may use the credit carryforward from the originally filed return in future years. Mark this field to continue to report this credit on Schedule P(540/540NR), Section A2 under the original legislation.
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