The California 3523 form is a tax document used to claim the Research Credit for the taxable year. This form is essential for businesses engaging in qualified research activities, allowing them to potentially reduce their tax liability. Completing the form accurately is crucial for maximizing available credits, so it is important to fill it out carefully.
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The California 3523 form serves as a vital tool for businesses seeking to claim research credits on their state tax returns. This form is particularly relevant for entities engaged in qualified research activities, allowing them to benefit from tax incentives designed to encourage innovation and development. The form is divided into several sections, each addressing different aspects of credit computation. In the first section, corporations can calculate their regular credit based on basic research payments and qualified research expenses, while individuals and other entities follow a distinct pathway to determine their eligible amounts. Alternatively, the form also provides an avenue for claiming the Alternative Incremental Credit, which is tailored for those who prefer a different calculation method. The detailed instructions guide users through the necessary calculations, including the assessment of base period amounts and the application of fixed-base percentages. Furthermore, it allows for the reporting of pass-through credits from various entities, ensuring that all eligible research credits are accounted for in the tax filing process. Understanding the nuances of the California 3523 form is essential for maximizing tax benefits and fostering an environment of research and development within the state.
TAXABLE YEAR
CALIFORNIA FORM
2021 RESEARCH CREDIT
3523
Attach to your California tax return.
Name(s) as shown on your California tax return
◻ SSN or ITIN ◻ CA Corporation no. ◻ FEIN
California Secretary of State file number
PART I Credit Computation. Read the instructions before completing this form.
SECTION A Regular Credit. If you are electing the Alternative Incremental Credit, skip this section and go to Section B.
Line 1 through line 4 are to be completed only by corporations (other than S corporations, personal holding companies, and service organizations). Individuals, S corporations, estates, trusts, partnerships, and limited liability companies (LLCs), begin on line 5.
1
Basic research payments paid or incurred during the taxable year. See instructions
2
Base period amount. See instructions
3
Subtract line 2 from line 1. If less than zero, enter -0-
4
Multiply line 3 by 24% (.24)
Qualified research expenses paid or incurred.
5
Wages for qualified services. See instructions
6
Cost of supplies. See instructions
7
Rental or lease costs of computers. See instructions
8
Enter the applicable percentage of contract research expenses. See instructions
9
Total qualified research expenses. Add line 5 through line 8
10
Enter fixed-base percentage, but not more than 16% (.16). See instructions
11
Enter average annual gross receipts. See instructions
12
Base amount. Multiply line 11 by the percentage on line 10
13
Subtract line 12 from line 9. If zero or less, enter -0-
14
Multiply line 9 by 50% (.50). See instructions
15
Enter the smaller of line 13 or line 14
16
Multiply line 15 by 15% (.15)
17a Regular credit. Add line 4 and line 16. If you do not elect the reduced credit under IRC Section 280C(c), enter the
result here, and see instructions for the schedule to attach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17a
bReduced regular credit under IRC Section 280C(c). Multiply line 17a by the applicable percentage below: 87.7% (.877) for individuals, estates, and trusts
91.16% (.9116) for corporations
98.5% (.985) for S corporations
Enter the reduced credit amount. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17b
00
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For Privacy Notice, get FTB 1131 EN-SP.
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FTB 3523 2021 Side 1
SECTION B Alternative Incremental Credit. Skip this section if you completed Section A, Regular Credit.
Line 18 through line 21 are to be completed only by corporations (other than S corporations, personal holding companies, and service organizations). Individuals, S corporations, estates, trusts, partnerships, and LLCs, begin on line 22.
18
19
20
Subtract line 19 from line 18. If less than zero, enter -0-
21
Multiply line 20 by 24% (.24)
22 Wages for qualified services. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
23 Cost of supplies. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
24 Rental or lease costs of computers. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
25 Enter the applicable percentage of contract research expenses. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
26 Total qualified research expenses. Add line 22 through line 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
27 Enter average annual gross receipts. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 28 Multiply line 27 by 1% (.01). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 29 Subtract line 28 from line 26. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 30 Multiply line 27 by 1.5% (.015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 31 Subtract line 30 from line 26. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 32 Subtract line 31 from line 29. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32 33 Multiply line 27 by 2% (.02). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 34 Subtract line 33 from line 26. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 35 Subtract line 34 from line 31. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 36 Multiply line 32 by 1.49% (.0149) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 37 Multiply line 35 by 1.98% (.0198) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 38 Multiply line 34 by 2.48% (.0248) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
39a Alternative incremental credit. Add line 21, line 36, line 37, and line 38. If you do not elect the reduced credit
under IRC Section 280C(c), enter the result here, and see instructions for the schedule that must be attached . . . . . . . 39a
bReduced alternative incremental credit under IRC Section 280C(c). Multiply line 39a by the applicable percentage below: 87.7% (.877) for individuals, estates, and trusts
Enter the reduced credit amount. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39b
SECTION C Available Research Credit
40 Pass-through research credit(s) from S corporations, estates, trusts, partnerships, and LLCs. See instructions . . . . . . . . 40
41Current year research credit. If you did not elect the reduced credit under IRC Section 280C(c), add line 17a or
line 39a to line 40 and enter the result here. If you elected the reduced credit under IRC Section 280C(c),
add line 17b or line 39b to line 40 and enter the result here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
42Enter the amount of credit on line 41 that is from passive activities. If none of the amount on line 41 is from
passive activities, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
43 Subtract line 42 from line 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 44 Enter the allowable credit from passive activities. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
45Non-passive activity credit carryover from prior year. (Do not include credits received through assignment.)
See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
46 Total. Add line 43 through line 45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
PART II Carryover Computation. Combined Report Filers see instructions for Part III before completing this part.
47Credit claimed. Enter the amount of the credit claimed on the current year tax return. See instructions.
(Do not include any assigned credit claimed on form FTB 3544, Part B.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
48Total credit assigned. Enter the total amount from form FTB 3544, Part A, column (g). If you are not a corporation,
enter -0-. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
49 Credit carryover available for use or assignment for future years. Subtract lines 47 and 48 from line 46 . . . . . . . . . . . . . . 49
Side 2 FTB 3523 2021
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PART III Credit Allocation and Carryover Per Entity – Only Combined Report Filers
To make an election for assigning credits, you must also complete form FTB 3544, Part A. Otherwise, the assignment indicated here will be invalid.
Credit Generated and Assigned Per Entity
(a)
(b)
(c)
(d)
(e)
Corporation
Corporation no., FEIN, or
Amount of credit generated
Amount of generated credit
Total of generated credit
SOS no.
in current year
carryover from prior years
and credit carryover from
prior years
col. (c) + col. (d)
Total
(f)*
(g)
(h)
Amount of credit from col. (e) claimed
Amount of research credit
Generated credit carryover
in current year return. (Do not include
assigned and to be reported
for future years
any assigned credit claimed on
on form FTB 3544, Part A
col. (e) – [col. (f) + col. (g)]
form FTB 3544, Part B.)
*There is a $5,000,000 business credit limitation on the application of tax credits. See instructions.
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FTB 3523 2021 Side 3
California Rental Application Pdf - Enables California landlords to thoroughly vet potential tenants based on their submitted personal and financial information.
Ca 109 - The form covers both calendar year 2020 and fiscal years beginning and ending in specified dates.