AB150 for CA State Tax Returns

[andrew0071]

Can anyone advise how overpayments for AB150 are tracked and applied [in future returns] by CA FTB?  We've participated last several years and have had overpayments every year amounting to a large sum.  I understand you have 5 year period to use up and wondering how they are applied i.e. FIFO etc.  Much appreciated it!

[DaveF1006]

Yes, the California Franchise Tax Board (FTB) uses a First-In, First-Out (FIFO) approach for applying these credits. By law, if you have credit carryovers from several years, you’ll need to use the oldest credits first.

[andrew0071]

That sounds good.  Do you know if I can sign into my FTB account and verify/confirm the credit amount they have for us? If not, another way I can verify what amount they have?  Thanks for your advice.

[MonikaK1]

The FTB uses Form 3804, Pass-Through Entity Elective Tax Calculation and Schedule of Qualified Taxpayers to link credit payments to individual partner returns. Taxpayers can monitor PTE payments, including prepayments, via their MyFTB account under "Payment History" and "Estimate Payments & Credits".

To report California Pass-Through Entity (PTE) Elective Tax, qualified entities (S-corps, Partnerships, LLCs) must file Form 3804 with their original return and pay 9.3% of qualified net income. Payments are made via FTB Web Pay or Form 3893, with initial payments due by June 15, and final payments by the return due date.

Partners/shareholders claim their share of the credit on their individual tax returns using form FTB 3804-CR, Pass-Through Entity Elective Tax Credit. 

@andrew0071 

[andrew0071]

Thank you MonikaK1!