California Prison Inmate Labor Credit
Extracted from PDF file 2020-california-form-3507.pdf, last modified October 2020
Prison Inmate Labor CreditTAXABLE YEAR 2020 CALIFORNIA FORM Prison Inmate Labor Credit Attach to your California tax return. The employer must keep the approved joint venture agreement for audit purposes. 3507 □ SSN or ITIN □ CA Corporation no. □ FEIN Name(s) as shown on your California tax return California Secretary of State file number 1 Total qualifying wages. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 00 2 Multiply line 1 by 10% (.10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 00 3 Pass-through prison inmate labor credit(s) from Schedule K-1 (100S, 541, 565, or 568). See instructions . . 3 00 4 Total available prison inmate labor credit. Add line 2 and line 3. See instructions . . . . . . . . . . . . . . . . . . . . . . 4 00 5 Carryover of the disallowed credit amount to future years. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . 5 00 What’s New Credit Limitation – For taxable years beginning on or after January 1, 2020, and before January 1, 2023, there is a $5,000,000 limitation on the application of business credits for taxpayers. The total of all business credits including the carryover of any business credit for the taxable year may not reduce the “net tax”, for personal income tax filers, or the “tax”, for corporate filers, by more than $5,000,000. For taxpayers included in a combined report, the limitation is applied at the group level. The business credits disallowed due to the limitation may be carried over. The carryover period for disallowed credits is extended by the number of taxable years the credit was not allowed. This limitation does not apply to the Low-Income Housing Credit. General Information A Purpose Use form FTB 3507, Prison Inmate Labor Credit, to figure a credit for wages paid to prison inmates under an approved joint venture with the California Department of Corrections. Also, use this form to claim pass-through prison inmate labor credits you received from S corporations, estates, trusts, partnerships, or limited liability companies (LLCs) classified as partnerships. S corporations, estates, trusts, partnerships, and LLCs classified as partnerships should complete form FTB 3507 to figure the amount of credit to pass through to shareholders, beneficiaries, partners, or members. Attach this form to Form 100S, California S Corporation Franchise or Income Tax Return; Form 541, California Fiduciary Income Tax Return; Form 565, Partnership Return of Income; or Form 568, Limited Liability Company Return of Income. Show the pass-through credit for each shareholder, beneficiary, partner, or member on Schedule K-1 (100S, 541, 565, or 568), Share of Income, Deductions, Credits, etc. B Qualifications California allows a credit equal to 10% of the wages paid to each prisoner who is employed under an approved joint venture with the California Department of Corrections. The credit amount is based on wages paid to each qualifying employee during the taxable year for the duration of the contract agreement. The credit applies only to wages paid pursuant to a contract agreement, between the director of corrections and the joint venture employer, executed on or before the day the individual begins work for the employer. C Limitations For taxable years beginning on or after January 1, 2020, and before January 1, 2023, there is a $5,000,000 limitation on the application of business credits, including carryover. For taxpayers included in a combined report, the limitation is applied at the group level. The limitation does not apply to the Low-Income Housing Credit. S corporations may claim only 1/3 of the credit against the 1.5% entity-level tax (3.5% for financial S corporations). The remaining 2/3 must be disregarded and may not be used as a carryover. S corporations can pass through 100% of the credit to their shareholders. For Privacy Notice, get FTB 1131 ENG/SP. If a taxpayer owns an interest in a disregarded business entity [a single member limited liability company (SMLLC) not recognized by California, and for tax purposes is treated as a sole proprietorship owned by an individual or a branch owned by a corporation], the usable credit amount received from the disregarded entity is limited to the difference between the taxpayer’s regular tax figured with the income of the disregarded entity, and the taxpayer’s regular tax figured without the income of the disregarded entity. For more information on SMLLC, get Form 568, Limited Liability Company Tax Booklet. This credit cannot reduce the regular tax below the minimum franchise tax (corporations and S corporations), the annual tax (limited partnerships, limited liability partnerships, and LLCs classified as a partnership), the alternative minimum tax (corporations, exempt organizations, individuals, and fiduciaries), the built-in gains tax (S corporations), or the excess net passive income tax (S corporations). This credit cannot reduce regular tax below the tentative minimum tax (TMT). Get Schedule P (100, 100W, 540, 540NR, or 541), Alternative Minimum Tax and Credit Limitations, for more information. There is no provision for carryover of any unused credit to succeeding tax years and in no event can you carry this credit back and apply it against a prior year’s tax. This credit is not refundable. D Assignment of Credits Assigned Credits to Affiliated Corporations – Credit earned by members of a combined reporting group may be assigned to an affiliated corporation that is an eligible member of the same combined reporting group. A credit assigned may only be claimed by the affiliated corporation against its tax liability. For more information, get form FTB 3544, Assignment of Credit, or go to ftb.ca.gov and search for credit assignment. Specific Line Instructions Line 1 – Enter the total amount of qualifying wages paid or incurred under the provisions of the approved joint venture. Line 3 – If you received more than one pass-through credit from S corporations, estates, trusts, partnerships, or LLCs classified as partnerships, add the amounts and enter the total. Attach a schedule showing the names and identification numbers of the entities from which the credits were passed through to you. Line 4 – The amount of this credit that you can claim on your tax return may be limited. See General Information C, Limitations. Also refer to the credit instructions in your tax booklet for more information. Use credit code 162 when you claim this credit. Line 5 – For taxable years 2020 through 2022 you are allowed to carryover the amount of credit that was disallowed due to the $5,000,000 limitation. The carryover period for a disallowed credit is extended by the number of taxable years the credit was not allowed. For more information see the applicable Schedule P. 7261203 FTB 3507 2020
2020 Form 3507 Prison Inmate Labor Credit
More about the California Form 3507 Corporate Income Tax Tax Credit TY 2020
We last updated the Prison Inmate Labor Credit in March 2021, so this is the latest version of Form 3507, fully updated for tax year 2020. You can download or print current or past-year PDFs of Form 3507 directly from TaxFormFinder. You can print other California tax forms here.
Other California Corporate Income Tax Forms:
|Form Code||Form Name|
|Form 100-ES||Corporation Estimated Tax|
|3805-Z Booklet||Enterprise Zone Business Booklet|
|Form 541-B Form||Charitable Remainder and Pooled Income Trusts|
|Form 3522||Limited Liability Company Tax Voucher|
|Form 541||California Fiduciary Income Tax Return|
California usually releases forms for the current tax year between January and April. We last updated California Form 3507 from the Franchise Tax Board in March 2021.
Form 3507 is a California Corporate Income Tax form. States often have dozens of even hundreds of various tax credits, which, unlike deductions, provide a dollar-for-dollar reduction of tax liability. Some common tax credits apply to many taxpayers, while others only apply to extremely specific situations. In most cases, you will have to provide evidence to show that you are eligible for the tax credit, and calculate the amount of the credit to which you are entitled.
About the Corporate Income Tax
The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.
Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).
Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.
Historical Past-Year Versions of California Form 3507
We have a total of ten past-year versions of Form 3507 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
2020 Form 3507 Prison Inmate Labor Credit
2019 Form 3507 Prison Inmate Labor Credit
2018 Form 3507 - Prison Inmate Labor Credit
2017 Form 3507 - Prison Inmate Labor Credit
2016 Form 3507 - Prison Inmate Labor Credit
2015 Form 3507 -- Prison Inmate Labor Credit
2014 Form 3507 -- Prison Inmate Labor Credit
2013 Form 3507 -- Prison Inmate Labor Credit
2012 Form 3507
2011 Form 3507 -- Prison Inmate Labor Credit
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