California Form 3523 – Fill Out and Use This PDF

The California Form 3523, otherwise known as the Research Credit form, serves as a detailed procedure for individuals, corporations, estates, trusts, partnerships, and limited liability companies in California to calculate and claim their tax credits for qualified research expenses incurred during the taxable year. This form, which is attached to the California tax return, elaborates on the computation of both the Regular and the Alternative Incremental Credits, guiding taxpayers through stipulated sections based on their entity type and the nature of the credits they seek. To ensure accurate computation and submission of eligible research credits, taxpayers are advised to comprehend thoroughly the instructions provided within the form.

Interested individuals or entities are encouraged to fill out the California Form 3523 by clicking the button below.

Get Form Now Download PDF

California Form 3523 PDF Details

In the realm of fostering innovation and research within California, the California Form 3523, known as the Research Credit form, plays a pivotal role by offering a tax incentive for businesses engaged in qualifying research activities within the state. This form, integral to the state tax filing process for the year 2020, is designed to calculate and claim tax credits on research expenses. Applicable to a diverse array of entities including corporations, S corporations, estates, trusts, partnerships, and limited liability companies (LLCs), Form 3523 accommodates various sections to guide taxpayers through the computation of regular and alternative incremental credits based on the specifics of their research expenditures. By meticulously subtracting base period amounts from current year research payments and applying predetermined percentages to the resulting figures, entities can ascertain the credit due to them, which may substantially reduce their tax liabilities. Moreover, the form makes provisions for reducing the regular credit under IRC Section 280C(c) for different types of filers, thereby aligning the state tax benefit with federal guidelines. In addition to computing the current year's credit, the form outlines the procedures for credit carryover calculations, ensuring that taxpayers can leverage unused credits in future tax periods, enhancing the long-term benefits of their innovative endeavors. Through its comprehensive structure, Form 3523 symbolizes California's commitment to supporting research and development activities, thus cementing the state's status as a hub of innovation.

Question	Answer
Form Name	California Form 3523
Form Length	3 pages
Fillable?	No
Fillable fields	0
Avg. time to fill out	45 sec
Other names	form 3523, ca research credit, california form ftb 3523, 3523

Form Preview Example

TAXABLE YEAR		CALIFORNIA FORM

2020 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	1
2	Base period amount. See instructions	2
3	Subtract line 2 from line 1. If less than zero, enter -0-	3
4	Multiply line 3 by 24% (.24)	4
	Qualified research expenses paid or incurred.
5	Wages for qualified services. See instructions	5
6	Cost of supplies. See instructions	6
7	Rental or lease costs of computers. See instructions	7
8	Enter the applicable percentage of contract research expenses. See instructions	8
9	Total qualified research expenses. Add line 5 through line 8	9
10	Enter fixed-base percentage, but not more than 16% (.16). See instructions	10
11	Enter average annual gross receipts. See instructions	11
12	Base amount. Multiply line 11 by the percentage on line 10	12
13	Subtract line 12 from line 9. If zero or less, enter -0-	13
14	Multiply line 9 by 50% (.50). See instructions	14
15	Enter the smaller of line 13 or line 14	15
16	Multiply line 15 by 15% (.15)	16

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

			7311203
	For Privacy Notice, get FTB 1131 ENG/SP.		7311203	FTB 3523 2020 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	Basic research payments paid or incurred during the taxable year. See instructions	18
19	Base period amount. See instructions	19
20	Subtract line 19 from line 18. If less than zero, enter -0-	20
21	Multiply line 20 by 24% (.24)	21
	Qualified research expenses paid or incurred.

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

91.16% (.9116) for corporations

98.5% (.985) for S corporations

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 45 Non-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 2020

7312203

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)

1

2

3

4

5

6

7

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.)

1

2

3

4

5

6

7

Total

* There is a $5,000,000 business credit limitation on the application of tax credits. See instructions.

7313203

FTB 3523 2020 Side 3

How to Edit California Form 3523 Online for Free

When you intend to fill out ca 3523, you won't have to download any kind of programs - simply try using our PDF editor. FormsPal team is aimed at providing you the best possible experience with our tool by consistently introducing new features and upgrades. Our editor is now even more helpful thanks to the most recent updates! Currently, working with PDF forms is simpler and faster than ever before. Getting underway is simple! Everything you need to do is follow the following easy steps below:

Step 1: Firstly, open the pdf tool by clicking the "Get Form Button" at the top of this webpage.

Step 2: This tool provides the opportunity to customize nearly all PDF documents in a variety of ways. Enhance it by adding any text, correct what's originally in the document, and include a signature - all within a few mouse clicks!

It will be simple to complete the document using this practical guide! This is what you need to do:

1. The ca 3523 requires particular information to be typed in. Ensure that the following blank fields are filled out:

Filling in section 1 in 2020 california 3523

2. Your next step is usually to submit these particular blanks: Rental or lease costs of, Enter the applicable percentage, Total qualified research expenses, Enter fixedbase percentage but, Enter average annual gross, Base amount Multiply line by the, Subtract line from line If zero, Multiply line by See, Enter the smaller of line or, Multiply line by , a Regular credit Add line and, result here and see instructions, b Reduced regular credit under IRC, and for individuals estates and.

2020 california 3523 completion process clarified (stage 2)

3. This third step is fairly uncomplicated, for individuals estates and, For Privacy Notice get FTB ENSP, and FTB Side - these fields is required to be filled out here.

The best ways to fill in 2020 california 3523 stage 3

4. Your next subsection needs your details in the following areas: Section B Alternative Incremental, Line through line are to be, Basic research payments paid or, Qualified research expenses paid, and Wages for qualified services See. Make certain to fill out all of the needed info to go further.

Step number 4 for submitting 2020 california 3523

Be very mindful when completing Section B Alternative Incremental and Line through line are to be, as this is where many people make a few mistakes.

5. To finish your form, this particular subsection has a couple of extra blanks. Entering Wages for qualified services See, under IRC Section Cc enter the, b Reduced alternative incremental, for individuals estates and, Section C Available Research Credit, Passthrough research credits from, line a to line and enter the, Enter the amount of credit on, passive activities enter , See instructions , Part II Carryover Computation, Credit claimed Enter the amount, Do not include any assigned credit, Total credit assigned Enter the, and enter See instructions will wrap up everything and you'll surely be done in a short time!

Part no. 5 of filling in 2020 california 3523

Step 3: As soon as you've reread the information you filled in, press "Done" to finalize your FormsPal process. Sign up with us today and instantly get ca 3523, ready for downloading. All changes you make are saved , which means you can customize the file at a later stage when required. Here at FormsPal, we endeavor to make sure all of your details are kept secure.

California Form 3523 – Fill Out and Use This PDF

California Form 3523 PDF Details

Form Preview Example

How to Edit California Form 3523 Online for Free

California Form 3523 isn’t the one you’re looking for?

Related Documents