540Nr Form – Fill Out and Use This PDF

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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 line 86, Form 540NR, California Nonresident or Part-Year Resident Income Tax Return, 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 15 .

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 to 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 540NR, line 84, matches amounts from your W-2’s .

Claiming standard deduction or itemized deductions:

See Form 540NR, 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 81 of Form 540NR . Confirm only California income tax withheld is claimed .

Verify real estate or other withholding amount from Form 592-B, Resident and Nonresident Withholding Tax Statement, and Form 593, Real Estate Withholding Tax Statement . See instructions for line 83 for Form 540NR .

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 .

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 125 of Form 540NR and include any adjustment by FTB .

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 and student under age 24 who received more than $2,200 of investment income in 2019, complete Form 540NR and form FTB 3800, Tax Computation for Certain Children with Unearned Income, to figure the tax on a separate Form 540NR 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 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 . 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 540NR .

•Tax on a lump-sum distribution .

•Tax on a qualified retirement plan including an Individual Retirement Arrangement (IRA) or an Archer Medical Savings Account .

•Tax for children under age 19 or a 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 an 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, you may file head of household for California only if you meet the requirements to be considered not in a domestic partnership .

Exception: If you file a joint tax return for federal, 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 you would have used to file a federal income tax return .

Single

You are single if any of the following is true on December 31, 2019: You were never 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 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 . 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 you had a child living with you and you lived apart from your spouse/RDP during the entire last six months of 2019 .

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.

Qualifying Widow(er)

Check the box on Form 540NR, line 5 and use the joint tax 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 .

Which Form To Use

Beginning in tax year 2019, Short Form 540NR, has been eliminated . Use Form 540NR if either you or your spouse/RDP were a nonresident or part-year resident in tax year 2019 .

If you and your spouse/RDP were California residents during the entire tax year 2019, use Forms 540 or 540 2EZ . To download or order the 540 Personal Income Tax Booklet or the 540 2EZ Personal Income Tax Booklet, go to ftb.ca.gov/forms or see, “Where to Get Income Tax Forms and Publications .”

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 (540NR), California Adjustments - Nonresidents or Part-Year 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 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 86 of Form 540NR, 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 (540NR) 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 (540NR) .

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 540NR 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 (540NR) .

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 the Schedule CA (540NR) 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 (540NR) 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 (540NR) 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.govand 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 California Form 540NR .

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 (540NR) .

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 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 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 .

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 mandatory e-pay requirement does not have to be made electronically. Individuals who do not send the payment electronically may 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 tax 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 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 . Please 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 .

Group Nonresident Returns (also known as Composite Returns) – For taxable years beginning on or after January 1, 2009:

Group nonresident returns may include less than two nonresident individuals . Nonresident individuals with more than $1,000,000 of California taxable income are eligible to be included in group nonresident returns . An additional 1% tax will be assessed on their entire California taxable income if they elect to be part of the group return .

See FTB Pub . 1067, Guidelines for Filing a Group Form 540NR, for more information .

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 .

General Information

Nonresidents of California who received California sourced income in 2019, or moved into or out of California in 2019, file Form 540NR, California Nonresident or Part-Year Resident Income Tax Return . California taxes all income received while you resided in California and the income you received from California sources while a nonresident .

If you file Form 540NR, use Schedule CA (540NR), California Adjustments — Nonresidents or Part-Year Residents, column A through column D to compute your total adjusted gross income as if you were a resident of California for the entire year . Use column E to compute all items of total adjusted gross income you received while a resident of California and those you received from California sources while a nonresident . You determine your California tax by multiplying your California taxable income by an effective tax rate . The effective tax rate is the tax on total taxable income, taken from the tax table, divided by total taxable income . You may also qualify for California tax credits, which reduces the amount of California tax you owe .

If you were a resident of California for all of 2019 get a California Resident Personal Income Tax Booklet and file Form 540, California Resident Income Tax Return; or Form 540 2EZ, California Resident Income Tax Return .

For more information on the taxation of nonresidents and part-year residents, get FTB Pub . 1100, Taxation of Nonresidents and Individuals Who Change Residency. Go to ftb.ca.gov/forms or see “Where To Get Income Tax Forms and Publications .”

Pension Income of Retirees Who Move to Another State

Nonresidents of California Receiving a California Pension

California does not impose tax on retirement income attributable to services performed in California received by a nonresident after December 31, 1995 .

California Residents Receiving an Out-of-State Pension

In general California residents are taxed on all income, including income from sources outside California . Therefore, a pension attributable to services performed outside California but received after you become a California resident is taxable .

For more information about pensions, go to ftb.ca.gov/forms and get FTB Pub . 1005, Pension and Annuity Guidelines .

Temporary and Transitory Absences from California

If you are domiciled in California and you worked outside of California for an uninterrupted period of at least 546 consecutive days under an employment contract, you are considered a nonresident . This provision also applies to the spouse/RDP who accompanies the employed individual during those 546 consecutive days . However, you will not qualify under this provision if you are present in California for a total of more than 45 days during any taxable year covered by the contract, or if you have income from stocks, bonds, notes, or other intangible property in excess of $200,000 for any taxable year covered by the contract . For more information, go to ftb.ca.gov/forms and get FTB Pub . 1031 .

Before You Begin

Complete your federal income tax return (Form 1040, U .S . Individual Income Tax Return; Form 1040-SR, U .S . Tax Return for Seniors; Form 1040NR, U .S . Nonresident Alien Income Tax Return; or

Form 1040NR-EZ, U .S . Income Tax Return for Certain Nonresident Aliens With No Dependents) before you begin your Form 540NR, California Nonresident or Part-Year Resident Income Tax Return . Use information from your federal income tax return to complete your Form 540NR . Complete and mail Form 540NR by April 15, 2020 . If unable to mail your return by this date see page 2 .

To get forms and publications referred to in these instructions, go to ftb.ca.gov/forms or see “Where To Get Income Tax Forms and Publications .”

You may qualify for the federal earned income tax credit . See page 2 for more information .

Note: The lines on Form 540NR are numbered with gaps in the line number sequence . For example, lines 20 through 30 do not appear on Form 540NR . So the line number that follows line 19 on Form 540NR is line 31 .

Caution: Form 540NR has five sides . If filing Form 540NR, you must send all five sides to the Franchise Tax Board (FTB) .

If you need to amend your Form 540NR, complete an amended Form 540NR and check the box at the top of Form 540NR indicating AMENDED return . Attach Schedule X, California Explanation of Amended Return Changes, to the amended Form 540NR . For specific instructions, see “Instructions for Filing a 2019 Amended Return” on page 27 .

Filling in Your 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 540NR, 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 zero . 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 Form 540NR .

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 .

Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)

Enter your SSNs in the spaces provided . If you file 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 a resident alien for federal tax purposes, and the Internal Revenue Service (IRS) issued you an ITIN, enter the ITIN in the space provided 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

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 .

Usually, your California filing status must be the same as the filing status you used on your federal income tax return .

Exception for Married Taxpayers Who File a Joint Federal Income Tax Return – You may file separate California returns 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 either spouse earned California source income while domiciled in a community property state, the 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 . For more information, get FTB Pub . 1031, Guidelines for Determining Resident Status .

If you did not file a federal tax return because you did not have a federal filing requirement, use the filing status you would have used had you been required to file .

Registered domestic partners (RDPs) who file single for federal must filemarried/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 .

Nonresident Alien – A joint tax return may be filed if, in the case of a nonresident alien married to a United States citizen or resident, both spouses/RDPs elect to treat the nonresident alien spouse/RDP as a resident for tax purposes .

If You Filed Federal Form 1040NR or Form 1040NR-EZ, you do not qualify to use the head of household or married/RDP filing jointly filing statuses . Instead, use single, married/RDP filing separately, or qualifying widow(er) filing status, whichever applies to you .

If You File as Head of Household, do not claim yourself or a nonrelative as the qualifying individual for head of household . Get FTB Pub . 1540, California Head of Household Filing Status, for more information . See “Where To Get Income Tax Forms and Publications .”

Exemptions

Line 6 – Can be Claimed as a Dependent

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 540NR, line 7 .

Yes Ignore the instructions on Form 540NR, line 7 . Instead, enter 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 .

Line 8 – Blind Exemptions

The first year you claim this exemption credit, attach a doctor’s statement to the back of Form 540NR indicating that you or your spouse/RDP is 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 . The persons you list as dependents must be the same persons you listed as dependents on your federal income 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 .

Total Taxable Income

Refer to your completed federal income tax return to complete this section .

Line 12 – California Wages

Enter the total amount of your California wages from your federal Form(s) W-2, Wage and Tax Statement . This amount appears on Form W-2, box 16 .

Line 13 – Federal Adjusted Gross Income (AGI) from federal Form 1040 or 1040-SR, line 8b; 1040NR, line 35; or 1040NR-EZ, line 10

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 Form 540NR, 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 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 single, 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 540NR, line 13 .

Line 14 – California Adjustments — Subtractions

(from Schedule CA (540NR), Part II, line 23, column B)

If there are differences between your federal and California income, i .e social security, complete Schedule CA (540NR) . Follow the instructions for Schedule CA (540NR) . Enter the amount from Schedule CA (540NR), Part II, line 23, column B on Form 540NR, line 14 .

If the amount on Schedule CA (540NR), Part II, line 23, column B is a negative number, do not transfer it to Form 540NR, line 14 as a negative number . Instead, transfer the number as a positive number to Form 540NR, line 16 .

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 amount in parentheses . For example: “(12,325) .”

Line 16 – California Adjustments — Additions

(from Schedule CA (540NR), Part II, line 23, column C)

If there are differences between your federal and California deductions, complete Schedule CA (540NR) . Follow the instructions for Schedule CA (540NR) . Enter the amount from Schedule CA (540NR), Part II, line 23, column C on Form 540NR, line 16 .

If the amount on Schedule CA (540NR), Part II, line 23, column C is a negative number, do not transfer it to Form 540NR, line 16 as a negative number . Instead, transfer the number as a positive number to Form 540NR, line 14 .

Line 17 – Adjusted Gross Income From All Sources

Combine line 15 and line 16 . This amount should match the amount on Schedule CA (540NR), Part II, line 23, column D .