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California Free Printable 2019 540 California Personal Income Tax Booklet for 2020 California California 540 Form Instruction Booklet

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California 540 Form Instruction Booklet
2019 540 California Personal Income Tax Booklet

CALIFORNIA 540 Forms & Instructions 2019 Personal Income Tax Booklet Members of the Franchise Tax Board Betty T. Yee, Chair Malia M. Cohen, Member Keely Bosler, Member COVER GRAPHICS OMITTED FOR DOWNLOADING SPEED Table of Contents Important Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Do I Have to File? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What’s New and Other Important Information for 2019 . . . . . . . . . . . . Which Form Should I Use? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Instructions for Form 540 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nonrefundable Renter’s Credit Qualification Record . . . . . . . . . . . . . . Voluntary Contribution Fund Descriptions . . . . . . . . . . . . . . . . . . . . . . Credit Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Frequently Asked Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Instructions for Filing a 2019 Amended Return . . . . . . . . . . . . . . . . . . Form 540, California Resident Income Tax Return . . . . . . . . . . . . . . . Schedule CA (540), California Adjustments — Residents . . . . . . . . . . Instructions for Schedule CA (540) . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedule D (540), California Capital Gain or Loss Adjustment . . . . . . Instructions for Schedule D (540) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Important Dates  2  3  4  7  8 20 21 23 24 25 27 29 35 39 49 51 FTB 3519, Payment for Automatic Extension for Individuals . . . . . . . . Form 540-ES, Estimated Tax for Individuals . . . . . . . . . . . . . . . . . . . . Instructions for Form 540-ES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FTB 3506, Child and Dependent Care Expenses Credit . . . . . . . . . . . . Instructions for Form FTB 3506 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FTB 3514, California Earned Income Tax Credit . . . . . . . . . . . . . . . . . . Instructions for Form FTB 3514 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2019 California Tax Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2019 California Tax Rate Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . How To Get California Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . Privacy Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Automated Phone Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 56 59 63 65 69 73 87 93 94 94 95 When the due date falls on a weekend or holiday, the deadline to file and pay without penalty is extended to the next business day. April 15, 2020* Last day to file and pay the 2019 amount you owe to avoid penalties and interest.* See form FTB 3519 for more information. * If you are living or traveling outside the United States on April 15, 2020, the dates for filing your tax return and paying your tax are different. See form FTB 3519 for more information. October 15, 2020 Last day to file or e-file your 2019 tax return to avoid a late filing penalty and interest computed from the original due date of April 15, 2020. April 15, 2020 June 15, 2020 September 15, 2020 January 15, 2021 The dates for 2020 estimated tax payments. Generally, you do not have to make estimated tax payments if the total of your California withholdings is 90% of your required annual payment. Also, you do not have to make estimated tax payments if you will pay enough through withholding to keep the amount you owe with your tax return under $500 ($250 if married/ registered domestic partner (RDP) filing separately). However, if you do not pay enough tax either through withholding or by making estimated tax payments, you may have an underpayment penalty. See Form 540-ES instructions for more information. $$$ for You Earned Income Tax Credit •• Federal Earned Income Tax Credit (EIC) – EIC reduces your federal tax obligation, or allows a refund if no federal tax is due. You may qualify if you earned less than $50,162 ($55,952 if married filing jointly) and have qualifying children or you have no qualifying children and you earned less than $15,570 ($21,370 if married filing jointly). Go to the IRS website at irs.gov/taxtopics and choose topic 601, see 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 $30,001. 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 •• 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 CA EITC 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, line 76, and get form FTB 3514. Refund of Excess State Disability Insurance (SDI) – If you worked for at least two employers during 2019 who together paid you more than $118,371 in wages, you may qualify for a refund of excess SDI. See the instructions on page 13. 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. Page 2  Personal Income Tax Booklet  2019 •• Claiming the wrong amount of withholding by incorrectly totaling or transferring the amounts from your W-2. •• Claiming the wrong amount of real estate withholding. •• Claiming the wrong amount of SDI. •• Claiming the wrong amount of exemption credits. To avoid errors and help process your tax return faster, use these helpful hints when preparing your tax return. 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 2018 tax return you requested to be applied to your 2019 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 line 71 of Form 540. Confirm only California income tax withheld is claimed. •• Verify real estate or other withholding amount from Form 592-B, Resident and Nonresident Withholding Statement, and Form 593, Real Estate Withholding Tax Statement. See instructions for line 73 of Form 540. 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 line 115 of Form 540 and include any adjustment by 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 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. 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. On 12/31/19, my filing status was: California Gross Income Dependents and on 12/31/19, my age was: (If your 65th birthday is on January 1, 2020, you are considered to be age 65 on December 31, 2019) 0 1 2 or more California Adjusted Gross Income Dependents 2 0 1 or more Single or Head of household Under 65 65 or older 18,241 24,341 30,841 33,791 40,291 41,351 14,593 20,693 27,193 30,143 36,643 37,703 Married/RDP filing jointly Married/RDP filing separately Under 65 (both spouses/RDPs) 65 or older (one spouse/RDP) 65 or older (both spouses/RDPs) 36,485 42,585 48,685 49,085 52,035 58,135 58,535 59,595 65,695 29,190 35,290 41,390 41,790 44,740 50,840 51,240 52,300 58,400 Qualifying widow(er) Under 65 65 or older Any age (The income of both spouses/RDPs must be combined; both spouses/RDPs may be required to file a tax return even if only one spouse/RDP had income over the amounts listed.) Dependent of another person Any filing status 30,841 40,291 27,193 36,643 33,791 41,351 30,143 37,703 More than your standard deduction (Use the California Standard Deduction Worksheet for Dependents on page 10 to figure your standard deduction.) 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 $2,200 of investment income in 2019, 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 $11,000 or less (but not less than $1,100) 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 2019 or owe any of the following taxes for 2019, 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 $2,200 (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 a registered domestic partnership (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 2019. •• A nonresident for the entire year and had no income from California sources during 2019. 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 2019, 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, 2019: •• 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, 2019, and did not remarry or enter into another registered domestic partnership in 2019. 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, 2019, even if you did not live with your spouse/RDP at the end of 2019. •• Your spouse/RDP died in 2019 and you did not remarry or enter into another registered domestic partnership in 2019. •• Your spouse/RDP died in 2020 before you filed a 2019 tax return. Married/RDP Filing Separately •• Community property rules apply to the division of income if you use the married/RDP filing separately 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. To get forms 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 2019. Personal Income Tax Booklet  2019  Page 3 Head of Household For the specific requirements that must be met to qualify for head of household (HOH) filing status, get FTB Pub. 1540, California Head of Household Filing Status. In general, head of household 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 head of household 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, 2019. •• You paid more than one-half the cost of keeping up your home for the year in 2019. •• 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 head of household filing status. •• You were not a nonresident alien at any time during the year. For a child to qualify as your foster child for head of household 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 head of household 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 Head of Household filing status. For more information about the Head of Household 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 Widow(er) Check the box on Form 540, line 5 and use the joint return tax rates for 2019 if all five of the following apply: •• Your spouse/RDP died in 2017 or 2018 and you did not remarry or enter into another registered domestic partnership in 2019. •• 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 2019: >> The child had gross income of $4,200 or more; >> The child filed a joint return, or >> You could be claimed as a dependent on someone else’s return. If the child isn't claimed as your dependent, enter the child's name in the entry space under the "Qualifying widow(er)" filing status. •• This child lived in your home for all of 2019. 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 2019 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. 2019 Tax Law Changes/What’s New Health Care Mandate – Effective January 1, 2020, the Minimum Essential Coverage Individual Mandate requires Californians to obtain and maintain qualifying health insurance coverage. Those who choose to go without coverage could face a financial penalty unless they qualify for an exemption. For information about health coverage options and financial help, go to coveredca.com. For information about the penalty, go to ftb.ca.gov/healthmandate. Voluntary Contributions – You may contribute to the following new fund: •• Suicide Prevention Voluntary Tax Contribution Fund Loophole Closure and Small Business and Working Families Tax Relief Act of 2019 – The Tax Cuts and Jobs Act (TCJA) signed into law on December 22, 2017, made changes to the IRC. California R&TC does not conform to all of the changes. In general, for taxable years beginning on or after January 1, 2019, California conforms to the following TCJA provisions: •• California Achieving a Better Life Experience (ABLE) Program •• Student loan discharged on account of death or disability •• Federal Deposit Insurance Corporation (FDIC) Premiums •• Excess employee compensation •• Excess business loss Like-Kind Exchanges – The TCJA amended IRC Section 1031 limiting the nonrecognition of gain or loss on like-kind exchanges to real property held for productive use or investment. California conforms to this change under the TCJA for exchanges initiated after Page 4  Personal Income Tax Booklet  2019 January 10, 2019. However, for California purposes, with regard to individuals, this limitation only applies to: •• A taxpayer who is a head of household, a surviving spouse, or spouse filing a joint return with adjusted gross income (AGI) of $500,000 or more for the taxable year in which the exchange begins. •• Any other taxpayer filing an individual return with AGI of $250,000 or more for the taxable year in which the exchange begins. Get Schedule D-1, Sales of Business Property, for more information. Young Child Tax Credit – For taxable years beginning on or after January 1, 2019, the refundable Young Child Tax Credit (YCTC) is available to taxpayers who also qualify for the California Earned Income Tax Credit (EITC) and who have at least one qualifying child who is younger than six years old as of the last day of the taxable year. The maximum amount of credit allowable for a qualified taxpayer is $1,000. The credit amount phases out as earned income exceeds the "threshold amount" of $25,000, and completely phases out at $30,000. For more information, see the instructions for line 76 of Form 540, California Resident Income Tax Return and get form FTB 3514. Net Operating Loss (NOL) Carrybacks – For taxable years beginning on or after January 1, 2019, net operating loss carrybacks are not allowed. Alimony – California law does not conform to changes made by the TCJA to federal law regarding alimony and separate maintenance payments that are not deductible by the payor spouse, and are not includable in the income of the receiving spouse, if made under any divorce or separation agreement executed after December 31, 2018, or executed on or before December 31, 2018, and modified after that date (if the modification expressly provides that the amendments apply). See Schedule CA (540) specific line instructions 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. Student Loan Discharged Due to Closure of a For-Profit School – California law allows an income exclusion for an eligible individual who is granted a discharge of any student loan under specified conditions. This income exclusion has now been expanded to include a discharge of student loans occurring on or after January 1, 2019, and before January 1, 2024, for individuals who attended a Brightwood College school or a location of The Art Institute of California. Additional information can be found in the instructions for California Schedule CA (540). Charitable Contribution and Business Expense Deduction Disallowance – For taxable years beginning on or after January 1, 2014, California law disallows a charitable contribution deduction to an educational organization that is a postsecondary institution or to the Key Worldwide Foundation, and a deduction for a business expense related to a payment to the Edge College and Career Network, LLC, to a taxpayer who meets specific conditions, including that they are named in any of several specified criminal complaints. For taxable years 2014 through 2018, file an amended Form 540 and Schedule X to report the correct amount of charitable contribution and business expense deductions. Additional information can be found in the instructions of California Schedule CA (540). Real Estate Withholding Statement – Effective January 1, 2020, the real estate withholding forms and instructions have been consolidated into one new Form 593, Real Estate Withholding Statement. For more information, get Form 593. Other Important Information California Earned Income Tax Credit (EITC) – For taxable years beginning on or after January 1, 2018, the age limit for an eligible individual without a qualifying child is revised to 18 years or older. For more information, go to ftb.ca.gov and search for EITC or get form FTB 3514. New Employment Credit – The sunset date for the New Employment Credit is extended until taxable years beginning before January 1, 2026. For more information, go to ftb.ca.gov and search for nec or get form FTB 3554, New Employment Credit. California Competes Tax Credit – The sunset date for the California Competes Tax Credit is extended until taxable years beginning before January 1, 2030. For more information, go to the GO-Biz website at business.ca.gov or ftb.ca.gov and search for ca competes or get form FTB 3531, California Competes Tax Credit. 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. IRC Section 965 Deferred Foreign Income – Under federal law, if you own (directly or indirectly) certain foreign corporations, you may have to include on your return certain deferred foreign income. California does not conform. For more information, see the Schedule CA (540) instructions. Global Intangible Low-Taxed Income (GILTI) Under IRC Section 951A – Under federal law, if you are a U.S. shareholder of a controlled foreign corporation, you must include your GILTI in your income. California does not conform. For more information, see the Schedule CA (540) instructions. Wrongful Incarceration Exclusion – California law conforms to federal law excluding from gross income certain amounts received by wrongfully incarcerated individuals for taxable years beginning before, on, or after January 1, 2018. If you included income for wrongful incarceration in a prior taxable year, you can file an amended California personal income tax return for that year. If the normal statute of limitations has expired, you must file a claim by January 1, 2019. College Access Tax Credit – For taxable years beginning on and after January 1, 2017, and before January 1, 2023, the College Access Tax Credit (CATC) is available to entities awarded the credit from the California Educational Facilities Authority (CEFA). The credit is 50% of the amount contributed by the taxpayer for the taxable year to the College Access Tax Credit Fund. The amount of the credit is allocated and certified by the CEFA. For more information, go to the CEFA website at treasurer.ca.gov and search for catc. Schedule X, California Explanation of Amended Return Changes – For taxable years beginning on or after January 1, 2017, 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 2019 Amended Return” on page 27. Improper Withholding on Severance Paid to Veterans – The 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. New Donated Fresh Fruits or Vegetables Credit – For taxable years beginning on or after January 1, 2017 and before January 1, 2022, qualified taxpayers may claim the New Donated Fresh Fruits or Vegetables Credit. This tax credit is for donations of fresh fruits or vegetables made to California food banks. The amount of the tax credit is 15% of the qualified value of the donated item, based on weighted average wholesale price. The credit may be claimed only on a timely filed original return. However, any credit not used in the taxable year may be carried forward up to seven years. For more information, get form FTB 3814, New Donated Fresh Fruits or Vegetables Credit. Low-Income Housing Credit-Allocations to Partners – For partnerships owning projects that receive a preliminary reservation of the Low‑Income Housing Credit (LIHC) before January 1, 2020, the prior law exception that requires a partnership to allocate the credit among partners based upon the partnership agreement is re-enacted. Sale of Credit – For projects that receive a preliminary reservation of the LIHC beginning on or after January 1, 2016, and before January 1, 2020, a taxpayer may make an irrevocable election in its application to the California Tax Credit Allocation Committee to sell all or any portion of the LIHC allowed to one or more unrelated parties for each taxable year in which the credit is allowed. An original purchaser is allowed a one-time resale of that credit to one or more unrelated parties. For more information, get form FTB 3521, Low-Income Housing Credit, or go to the California Tax Credit Allocation Committee website at treasurer.ca.gov/ctcac. 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 generally conforms to the federal income tax treatment of ABLE accounts. This program was established to help blind or disabled U.S. residents save money in a tax-favored ABLE account to maintain health, independence, and quality of life. Additional information can be found in the instructions of form FTB 3805P, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. New California Motion Picture and Television Production Credit – For taxable years beginning on or after January 1, 2016, a new California motion picture and television production credit will be allowed to a qualified taxpayer. The credit is allocated and certified by the California Film Commission (CFC). The qualified taxpayer can: •• Offset the credit against income tax liability. •• Sell the credit to an unrelated party (independent films only). •• Assign the credit to an affiliated corporation. •• Apply the credit against qualified sales and use taxes. For more information, get form FTB 3541, California Motion Picture and Television Production Credit, form FTB 3551, Sale of Credit Attributable to an Independent Film, go to ftb.ca.gov and search for motion picture, or go to the CFC website at film.ca.gov and search for incentives. 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. Additional information can be found in the instructions for California Form 540. Dependent Social Security Number (SSN) – Taxpayers claiming an exemption credit must write each dependent’s SSN in the spaces provided within line 10 for the California Form 540. Financial Incentive for Seismic Improvement – Taxpayers can exclude from gross income any amount received as loan forgiveness, grant, credit, rebate, voucher, or other financial incentive issued by the California Residential Mitigation Program or the California Earthquake Authority to assist a residential property owner or occupant with expenses paid, or obligations incurred, for earthquake loss mitigation. Additional information can be found in the instructions for California Schedule CA (540). Natural Heritage Preservation Credit – For qualified contributions made on or after January 1, 2015, the credit carryover period has been extended to 15 years or until exhausted, whichever occurs first. Any Personal Income Tax Booklet  2019  Page 5 unused credits remaining before January 1, 2015, will remain subject to an eight-year carryover provision. In addition, the period for when a qualified contribution is made, for which a tax credit will be allowed, has been extended to June 30, 2020. Disaster Losses – For taxable years beginning on or after January 1, 2014, and before January 1, 2024, taxpayers may deduct a disaster loss for any loss sustained in any city, county, or city and county in California that is proclaimed by the Governor to be in a state of emergency. For these Governor-only declared disasters, subsequent state legislation is not required to activate the disaster loss provisions. Additional information can be found in the instructions for California form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations – Individuals, Estates, and Trusts. Head of Household – California requires taxpayers who use head of household (HOH) filing status to file form FTB 3532, Head of Household Filing Status Schedule, to report how the HOH filing status was determined. To get form FTB 3532, see “Order Forms and Publications” or go to ftb.ca.gov/forms. Penalty Assessed by Professional Sports League – An owner of all or part of a professional sports franchise will not be allowed a deduction for the amount of any fine or penalty paid or incurred, that was assessed or imposed by the professional sports league that includes that franchise. Additional information can be found in the instructions for California Schedule CA (540). New Employment Credit – For taxable years beginning on or after January 1, 2014, and before January 1, 2021, the New Employment Credit (NEC) is available to a qualified taxpayer that hires a qualified full-time employee on or after January 1, 2014, and pays or incurs qualified wages attributable to work performed by the qualified full‑time employee in a designated census tract or economic development area, and receives a tentative credit reservation for that qualified full‑time employee. In addition, an annual certification of employment is required with respect to each qualified full-time employee hired in a previous taxable year. In order to be allowed a credit, the qualified taxpayer must have a net increase in the total number of full-time employees in California. Any credits not used in the taxable year may be carried forward up to five years. If a qualified employee is terminated within the first 36 months after beginning employment, the employer may be required to recapture previously taken credits. For more information, go to ftb.ca.gov and search for nec or get form FTB 3554, New Employment Credit. Repeal of Geographically Targeted Economic Development Area Tax Incentives – The California legislature repealed and made changes to all of the Geographically Targeted Economic Development Area (G-TEDA) Tax Incentives. Enterprise Zones (EZ) and Local Agency Military Base Recovery Areas (LAMBRA) were repealed on January 1, 2014. The Targeted Tax Areas (TTA) and Manufacturing Enhancement Areas (MEA) both expired on December 31, 2012. For more information, get the applicable EDA booklet. California Competes Tax Credit – For taxable years beginning on and after January 1, 2014, and before January 1, 2030, the California Competes Tax Credit is available to businesses that want to come to California or stay and grow in California. Tax credit agreements will be negotiated by the Governor’s Office of Business and Economic Development (GO-Biz) and approved by the California Competes Tax Credit Committee. The California Competes Tax Credit only applies to state income or franchise tax. Taxpayers who are awarded a contract by the committee will claim the credit on their income or franchise tax returns using credit code 233. The credit can reduce tax below the tentative minimum tax. Any credits not used in the taxable year may be carried forward up to six years. For more information, go to the GO‑Biz website at business.ca.gov or ftb.ca.gov and search for ca competes or get form FTB 3531, California Competes Tax Credit. Like-Kind Exchanges – California requires taxpayers who exchange property located in California for like‑kind property located outside of California under IRC Section 1031, to file an annual information return with the FTB. For more information, get form FTB 3840, California Like‑Kind Exchanges, or go to ftb.ca.gov and search for like kind. 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 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 Page 6  Personal Income Tax Booklet  2019 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, 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 Internal Revenue Service (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 (RDP) – 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, Tax Information for Registered Domestic Partners. 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. Please visit 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. 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? 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 2019? 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 Income Tax Booklet, go to ftb.ca.gov/forms or see, “Where to Get Income Tax Forms and Publications.” Form 540 2EZ Form 540 Form not included in this booklet. If you qualify to use Form 540 2EZ, see “Where To Get Income Tax Forms and Publications” to download or order this form. Filing Status Single, married/RDP filing jointly, head of household, qualifying widow(er) Any filing status Dependents Amount of Income 0-3 allowed All dependents you are entitled to claim Sources of Income Only income from: • Wages, salaries, and tips • Taxable interest, dividends, and pensions • Taxable scholarship and fellowship grants (only if reported on Form(s) W‑2) • Capital gains from mutual funds (reported on Form 1099‑DIV, box 2a only) • Unemployment compensation reported on Form 1099-G • Paid Family Leave Insurance • U.S. social security benefits • Tier 1 and tier 2 railroad retirement payments All sources of income Adjustments to Income Standard Deduction Itemized Deductions Payments No adjustments to income All adjustments to income Allowed Allowed No itemized deductions All itemized deductions Only withholding shown on Form(s) W-2 and 1099‑R • Withholding from all sources • Estimated tax payments • Payments made with extension • Excess State Disability Insurance (SDI) or Voluntary Plan Disability Insurance (VPDI) Tax Credits • Refundable California earned income tax credit • Refundable young child tax credit • Personal exemption credit • Senior exemption credit • Up to three dependent exemption credits • Nonrefundable renter’s credit All tax credits Other Taxes Only tax computed using the 540 2EZ Table All taxes Total income of: Any amount of income • $100,000 or less if single or head of household • $200,000 or less if married/RDP filing jointly or qualifying widow(er) You cannot use Form 540 2EZ if you (or your spouse/RDP) can be claimed as a dependent by another taxpayer, and your TOTAL income is less than or equal to $15,087 if single; $30,124 if married/RDP filing jointly or qualifying widow(er); or $21,324 if head of household. 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. Personal Income Tax Booklet  2019  Page 7  2019 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 C ­ alifornia 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, 2020. If unable to mail your tax return by this date, see page 2. You may qualify for the federal earned income credit. See page 2 for more information. Note: The lines on Form 540 are numbered with gaps in the line number sequence. For example, lines 20 through 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 five sides. When filing Form 540, you must send all five 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 2019 Amended Return” on page 27. To use our automated phone service and codes, call 800.338.0505. For the complete code list, see Automated Phone Service section. 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. •• 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 or 1040-SR), Profit or Loss From Business (Sole Proprietorship) business filers, enter the numeric PBA code from federal Schedule C (Form 1040 or 1040-SR), 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 2018 tax return under a different last name, write the last name only from the 2018 tax return. Page 8  Personal Income Tax Booklet  2019 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. 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. For filing status requirements, see page 3. Use the same filing status for California that you used for your federal income tax return. 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 2019. •• A nonresident for the entire year and had no income from California sources during 2019. Caution – 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 the­­nonresident spouse exception. 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 2019, you must file the Form 540NR, California Nonresident or Part-Year Resident Income Tax Return. Exemptions Line 6 – Can be Claimed as Dependent  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 the amount 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. e-file is fast, easy, and secure! 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, 2019,* 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, 2020, you are considered to be age 65 on December 31, 2019. 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 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. 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. If your dependent child was born and died in 2019 and you do not have an SSN for the child, enter “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  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 Form W-2, box 16. If you received wages and do not have a 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 8b 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 Instructions: Form 540 •• •• •• •• •• •• •• 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 separately, 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 23, column D, or federal pro forma Form 1040 or 1040-SR, line 8b, to Form 540, line 13. Line 14 – California Adjustments – Subtractions [from Schedule CA (540), Part I, line 23, column B] If there are no differences between your federal and California income or deductions, do not file a Schedule CA (540), California Adjustments — Residents. If there are differences between your federal and California income, i.e. social security, complete Schedule CA (540). Follow the instructions for Schedule CA (540). Enter on line 14 the amount from Schedule CA (540), Part I, line 23, column B. If a negative amount, see Schedule CA (540), Part I, line 23 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 23, 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 23, column C. If a negative amount, see Schedule CA (540), Part I, line 23 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 C ­ alifornia income tax will be less if you take the larger of: •• Your C ­ alifornia itemized deductions. •• Your C ­ alifornia 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 Form 540 – California Standard Deduction Worksheet for Dependents. Itemized deductions. Figure your ­California itemized deductions by ­completing Schedule CA (540), Part II, lines 1 through 30. Enter the result on Form 540, line 18. Personal Income Tax Booklet  2019  Page 9 Instructions: Form 540 e-file at ftb.ca.gov 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 or 1040-SR), Itemized Deductions. Then check the box on Side 2, Part II of the Schedule CA (540) and complete Part II. Attach both the federal Schedule A (Form 1040 or 1040-SR) and California Schedule CA (540) to the back of your tax return. Standard deduction. Find your standard deduction on the C ­ alifornia 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. Your Filing Status Enter On Line 18 1 – Single . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,537 2 – Married/RDP filing jointly . . . . . . . . . . . . . . . . . . . . . . . . . . $9,074 3 – Married/RDP filing separately . . . . . . . . . . . . . . . . . . . . . . . $4,537 4 – Head of household . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,074 5 – Qualifying widow(er) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,074 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1 2. Minimum standard deduction . . . . . . . . . . . . . . .  2 $1,100.00 3. Enter the larger of line 1 or line 2 here . . . . . . . .  3 4. Enter the amount shown for your filing status •• Single or married/RDP filing separately, enter $4,537 . . . . . . . . . . . . . . . . . . . . . . . . . •• Married/RDP filing jointly, head of household, or qualifying widow(er),     4 enter $9,074 . . . . . . . . . . . . . . . . . . . . . . . . 5. Standard deduction. Enter the smaller of line 3 or line 4 here and on Form 540, line 18 . . .  5 } Line 19 – Taxable Income Capital Construction Fund (CCF). If you claim a deduction on your federal Form 1040 or 1040-SR, line 11b for the contribution made to a capital construction fund set up under the 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, enter “CCF” and the amount of the deduction. For details, see federal Publication 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 of the following methods and check the matching box on line 31: •• Tax Table. If your taxable income on line 19 is $100,000 or less, use the tax table beginning on page 87. 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 on page 93. Page 10  Personal Income Tax Booklet  2019 •• 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 18 and under or a student under age 24 on January 1, 2020, and who had more than $2,200 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 $11,000 or less (but not less than $1,100) 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. 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 adjusted gross income (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 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. If your filing status is: Is line 13 more than: Single or married/RDP filing separately . . . . . . . . . . . . . . . . . . . $200,534 Married/RDP filing jointly or qualifying widow(er) . . . . . . . . . . . $401,072 Head of household . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $300,805 Yes Complete the
Extracted from PDF file 2019-california-form-540-540a-instructions.pdf, last modified January 2020

More about the California Form 540-540A Instructions Individual Income Tax TY 2019

This document contains the official instructions for filling out your California Form 540/540A. Use this booklet to help you fill out and file Form 540 or 540A. Form 540-540A Instructions requires you to list multiple forms of income, such as wages, interest, or alimony .

We last updated the California 540 Form Instruction Booklet in February 2020, so this is the latest version of Form 540-540A Instructions, fully updated for tax year 2019. You can download or print current or past-year PDFs of Form 540-540A Instructions directly from TaxFormFinder. You can print other California tax forms here.

Other California Individual Income Tax Forms:

TaxFormFinder has an additional 174 California income tax forms that you may need, plus all federal income tax forms.

Form Code Form Name
Form 540-540A Instructions California 540 Form Instruction Booklet
Form 540 Schedule CA California Adjustments - Residents
Form 540 California Resident Income Tax Return
Form 540-2EZ California Resident Income Tax Return
Form 3582 Payment Voucher for Individual e-filed Returns

Download all CA tax forms View all 175 California Income Tax Forms


Form Sources:

California usually releases forms for the current tax year between January and April. We last updated California Form 540-540A Instructions from the Franchise Tax Board in February 2020.

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About the Individual Income Tax

The IRS and most states collect a personal income tax, which is paid throughout the year via tax withholding or estimated income tax payments.

Most taxpayers are required to file a yearly income tax return in April to both the Internal Revenue Service and their state's revenue department, which will result in either a tax refund of excess withheld income or a tax payment if the withholding does not cover the taxpayer's entire liability. Every taxpayer's situation is different - please consult a CPA or licensed tax preparer to ensure that you are filing the correct tax forms!

Historical Past-Year Versions of California Form 540-540A Instructions

We have a total of five past-year versions of Form 540-540A Instructions in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:


2019 Form 540-540A Instructions

2019 540 California Personal Income Tax Booklet

2018 Form 540-540A Instructions

2018 Booklet 540 - Forms & Instructions Booklet

2017 Form 540-540A Instructions

2017 540 Booklet - Personal Income Tax Booklet - Forms & Instructions

2016 Form 540-540A Instructions

2016 540 Instructions California Resident Income Tax Return

2015 Form 540-540A Instructions

2015 Instructions for Form 540 --California Resident Income Tax Return


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