1. Mark Callahan, Statewide Volunteer Program Coordinator
Franchise Tax Board
Mark Callahan,
Statewide Volunteer Program Coordinator

2. AARP This Presentation is designed to:
Assist you in completing State of California Tax Returns.
Provide a reference while using TaxSlayer software.
For tax law information please consult the 2016 Counselor Reference Manual, or the 540 Booklet.

3. What Publications Will Help?
540 Booklet
Publication 1001 – California Adjustments
Publication 1005 – Pension and Annuity Guidelines
Publication 1540 – California Head of Household
Bring these publications to your class and give to your volunteers whenever possible. The 1001 and 1005 may not be fully updated by January, but even last year’s version will help a lot.

4. Duck Books

5. Electronic version available on ftb.ca.gov

6. What’s different for TY 2016?
Exemption credits:
Personal, senior, blind: $111
Dependents: $344
Renter’s Credit:
$39,062 for singles
$78,125 MFJ, HOH, QW

7. Form 3532 Head of Household
Schedule

8. FTB 3504, Enrolled Tribal Member Certification
An enrolled member of a federally recognized tribe may not have to pay California income tax if they live on the tribe’s Indian country, they earn or receive reservation source income from the same Indian country in which they live, and are an enrolled member.
FTB 3504 was developed to allow enrolled tribal members to declare that they reside within Indian country and meet the tax exemption requirements.
Form can be filed alone or with a CA return.

9. What’s almost the same?

10. California Earned Income Tax Credit (EITC)
The CA EITC is "refundable," meaning that you will receive a refund if the amount of the credit is greater than the tax you owe
This credit is available to California households with adjusted gross income of less than $6,718 if there are no qualifying children, less than $10,088 if there is one qualifying child, or less than $14,162 if there are two or more qualifying children
Maximum credit amounts are $214 with no qualifying children, $1428 with one qualifying child, $2358 with two qualifying children, and $2653 with three or more qualifying children

11. California Earned Income Tax Credit (EITC)​
There are important differences between the California EITC and its federal counterpart
The CA EITC requires earned income reported on a W-2 form, such as wages, salaries, and tips, which must be subject to California withholding
Unlike the federal EITC, income from self-employment cannot be used to qualify for the California credit
You must file a state tax return, even if you do not owe any tax or are not otherwise required to file

12. California Earned Income Tax Credit (EITC)​
You, your spouse, and any qualifying children must each have a social security number issued by the Social Security Administration that is valid for employment.
You must file using the single, married/registered domestic partner (RDP) filing jointly, or head of household filing status
The “married/RDP filing separately” status may not be used.
Your principal residence must be in California for more than half the tax year

13. California Earned Income Tax Credit (EITC)
FTB 3514, California Earned Income Tax Credit, must be completed and filed with return to claim credit
The credit amount, if you qualify, will be on line 75 of the 540 return,
Taxpayers who would like to file returns to claim EITC are being encouraged to use the Volunteer Program to prepare those returns

14. Use 999999 when State ID number box is blank on the W-2.

15. Renter’s Credit

16. If your taxpayer qualifies, answer yes and the software takes care of putting the credit on the CA return.
Mention the importance of the Forms Tree as an aid to completing the tax return. Use red exclamations and blue checks as a guide to form completion.
Checking the box yes forces the Renter’s Credit Worksheet. The Renter’s Credit worksheet is a record for the taxpayer and calculates the correct amount of credit. It does not efile with the return but is necessary to make TaxWise work properly. Take volunteers line by line through the renter’s credit worksheet, explaining each line as you go. More advanced volunteers have figured out the shortcut to bypass the renter’s credit worksheet, check the box No the taxpayer does not rent. When is that appropriate? What are the pitfalls to look for when using that shortcut?

17. If taxpayer has a tax liability, renter’s credit will help reduce that liability

18. Child and Dependent Care

19. The information entered on the federal form 2241 is transferred to the CA Form The provider’s phone number is mandatory for California.
Give examples. What happens when the taxpayer owes $0 tax? Does a mobile home owner that pays rent qualify for Renter’s Credit? What about that MFJ couple that lived apart all year?

20. Interest

21. To subtract interest taxed by the feds and not by the state, enter the amount and the state in the appropriate boxes.
Use the New Interest Statement to designate interest as non-taxable to California. Link from the interest line 8a on the 1040 to the Schedule B, line from the Schedule B Other Interest line to the New Interest Statement. Check CA CA to verify that savings bond interest has been removed from California taxable income.

22. HOH Filing Status

23. For the FTB Form 3532, Head of Household Filing Status schedule, complete this worksheet under the state basic information section.
Take the class through the HOH schedule, pages one and two, using the red defaults as a guide, line by line. Discuss the importance of the HOH schedule to avoid and/or resolve correspondence from FTB after end of season.

24. CA Capital Loss Carryover

25. Under the Capital Gains begin button you will find the
Other Capital Gain Data button.

26. On the Other Capital Gains Data page, enter the amount of the
Short or Long Term Loss on the appropriate line.

27. The Capital Gain Loss Carry over does not transfer to column C.
It also does not add a CA Sch D to the return print stack.

28. Refunds

29. On the State E-file screen, select direct deposit if the taxpayer would like their refund to drop straight into their bank account.
The electronic filing box is usually set as a default. It is a required field. It is also a good idea to default the sign electronically box Yes.
The refund boxes determine the account a direct deposit will post to. In the event of a federal balance due with direct debit, and a state refund, one must check the box to deposit the refund into a different account, and re-key the routing and bank account number. Tax-Wise will guide the user to re-key the routing and bank account numbers in all other direct deposit/direct debit combinations once diagnostics is run.
Electronic funds withdrawal of a state balance due also requires re-keying of the routing number and bank account information.
Cut and paste is a good way to avoid errors. TaxWise will catch errors when diagnostics is run.

30. Enter banking information for direct deposit under the state return section.

31. Where do I get help? Volunteer Hotline – 1.800.522.5665
Operating hours – Monday thru Friday
(except state and fed holidays)
8 A.M. until 4:00 P.M.
Add your name and phone number as the trainer, or delete info for trainer name and phone number.

32. Questions?
Remind the volunteers of where to get help, if needed, during the filing season. Thank them for their time and attention during your class, and for volunteering during the tax season.