How are contributions to the Sea Otter Fund used?

The California Coastal Conservancy and the Department of Fish and Game will each be allocated 50% of the contributions. Contributions allocated to the California Coastal Conservancy will be used for research, science, protection, projects, or programs related to the Federal Sea Otter Recovery Plan or improving the nearshore ocean ecosystem, including program activities to reduce sea otter mortality. Contributions allocated to the Department of Fish and Game will be used to establish a sea otter fund within the department's index coding system for increased investigation, prevention, and enforcement action.

What is the Community Development Financial Institutions Investment Credit?

Certification is required to take this credit. The credit is equal to 20% of each qualified investment made to a community development financial institution. You can obtain certification from:

California Organized Investment Network (COIN)
Department of Insurance
300 Capitol Mall, Suite 1600
Sacramento, CA 95814

or go to www.insurance.ca.gov.

If this credit is being passed through to you as a member of an S corporation, estate or trust, partnership, or limited liability company (LLC), you should be able to find the amount of credit on your Schedule K-1.

What is the Enterprise Zone Employee Credit?

This credit is 5% of each employee's qualified wages for the year (maximum credit is $525 per employee). Qualified wages are wages earned in the geographic areas designated as Enterprise Zones (EZs).

To qualify for this credit in 2013, all of the following requirements must be met:
  • You performed at least 50% of your compensated work (for the employer located within the EZ) within the boundaries of an enterprise zone in California.
  • You spent at least 90% of your work time (for the employer located within the EZ) on activities that are directly related to the operation of the trade or business located within the EZ.
  • You didn't work for any federal, California state, or local government.
You'll need to fill out and file Form 3553 with your return to claim this credit.

What is the Natural Heritage Preservation Credit?

This California credit is equal to 55% of the fair market value of any qualified contribution made by the taxpayer to the state, any local government, or any designated nonprofit organization.

To qualify for this credit, you must make a contribution of property as defined in Section 37002 of the Public Resources Code and the Wildlife Conservation Board (WCB) must have approved the contribution for acceptance.

If this credit is being passed through to you as a member of an S corporation, estate or trust, partnership, or limited liability company (LLC), you should be able to find the amount of credit on your Schedule K-1.

You'll need to fill out and file Form 3503 with your return to claim this credit.

For more information regarding qualified contributions, contact the WCB at (916) 445-8448 or go to their website at wcb.ca.gov.

What are the qualifications for the Senior Head of Household Credit?

You may claim this credit if all of the following apply:
  • You were 65 years of age or older on December 31, 2013. If your 65th birthday is on January 1, 2014, you are considered to be age 65 on December 31, 2013.
  • You qualified as a Head of Household in 2011 or 2012 by providing a household for a qualifying individual who died during 2011 or 2012.
  • You did not have an adjusted gross income over $67,520 for 2013.

This credit is equal to 2% of your California taxable income shown on Line 19 of your Form 540/540NR, or $1,272, whichever is less. Use the Senior Head of Household Credit Worksheet to calculate your credit.

Why do I need to enter how much of my gambling income/losses came from the California state lottery?

California state lottery income/losses are treated differently than other gambling income/losses for income adjustments and itemized deductions purposes. They need to be entered so that the differences in California and non-California gambling income/losses can be correctly calculated on your return.

California lottery income is not taxable income for California tax purposes. Your taxable income will be reduced by the amount of California lottery income.

California lottery losses are not deductible for California tax purposes as an itemized deduction. Your potential itemized deductions will be reduced by the amount of California lottery losses.

What is the Targeted Tax Area Hiring Tax Credit?

These are business incentives for targeted tax area (TTA) businesses in California.

You'll need to fill out and file Form 3809 with your return using the Form 3809 Instructions to claim this credit.

What is a prior year net operating loss carryover?

A California prior year net operating loss (NOL) carryover is an NOL reported by your business or pass-through entity in a taxable year prior to 2013 that, due to income or other limitations, was not eligible to be taken as an offset to taxable income in the year it was incurred. A certain portion of that NOL can then be carried over to offset taxable income in later years.

How are contributions to the California Cancer Research Fund used?

Contributions will be used to conduct research relating to the causes, detection, and prevention of cancer, and to expand community-based education on cancer. It will also provide prevention and awareness activities for communities that are disproportionately at risk or afflicted by cancer.

What is use tax?

You may owe use tax on purchases you made from out-of-state or internet sellers if sales tax was not paid on the purchase and the items are used in California.

Use tax is similar to the sales tax paid on purchases you make in California. You may report use tax on your income tax return instead of filing a use tax return with the State Board of Equalization as long as you don't have a California seller's permit or a California consumer use tax account.

How do I determine my use tax?

Use the Use Tax Worksheet below to calculate your use tax liability if you owe use tax on any non-business purchases of items priced $1,000 or more, you owe use tax on any item used in a business not registered with the State Board of Equalization, or you prefer to calculate the exact amount of use tax due based upon your actual purchases instead of using California's estimated amount due.

If you aren't required to use the Use Tax Worksheet, you may use the Estimated Use Tax Table instead to determine how much use tax to report.

California Use Tax Worksheet
  1. Add the amounts of all purchases made from out-of-state or Internet sellers made without payment of California sales/use tax. Include only items you would have paid sales tax on if you had purchased them in California. You don't need to include items purchased for less than $1,000 if you are using the Estimated Use Tax Table for these items.
  2. Look up the use tax rate for the location where you used, gave away, stored, or consumed the items you purchased. To find your use tax rate, go to the California Board of Equalization website.
  3. Multiply the amount on Step 1 by the use tax rate on Step 2.
  4. If you didn't include ALL of your purchases in Line 1, enter your use tax liability from the Estimated Use Tax Table.
  5. Add Steps 3 and 4. This is your total use tax.
  6. Subtract any sales or use tax you paid to another state for the purchases included on Step 1. This is your total use tax due. Enter this amount on the screen.

What are estimated tax payments? What do I enter on this screen?

Estimated tax payments include payments you have already made to the state that were credited to your taxes owed this year.
  • Enter any estimated tax payments you made for 2013.
  • Enter any amounts credited from your 2012 return.
  • Enter any amount prepaid with extension requests.
Do NOT enter any amount of your 2013 California income tax withheld by your employer(s) as shown on any wage or tax statements.

What is the Child and Dependent Care Credit?

The California Child and Dependent Care Credit is a nonrefundable tax credit that is computed as a percentage of the federal Child and Dependent Care Credit.

The credit is allowed for certain household and dependent care expenses you incurred during the year that allowed you to seek or maintain gainful employment. Only expenses incurred for care actually performed in California qualify for this credit.

Do I qualify for the Child and Dependent Care Credit?

You qualify to claim this credit if you meet all of the following for the tax year:
  • The care was performed in California for one or more qualifying persons who lived in your home for more than half the year.
  • You paid for care so you could work or look for work.
  • You had at least as much earned income as you paid for child or dependent care.
  • Your federal adjusted gross income is $100,000 or less.
  • The person who provided care was not your spouse, the parent of your qualifying child, or a person who you can claim as a dependent.

Who is a qualifying individual for the Child and Dependent Care Credit?

A qualifying individual is either of the following:
  • A dependent of the taxpayer who is under 13 years of age
  • A spouse or a dependent of the taxpayer who is physically or mentally unable to care for him or herself

What is the Nonrefundable Renter's Credit?

The Nonrefundable Renter's Credit is for California residents who paid rent for their principal residence for at least 6 months in 2013 and whose adjusted gross income does not exceed a certain limit.

The Nonrefundable Renter's Credit is a personal income tax credit that can only be used to offset your tax liability; therefore, you must have a tax liability to claim the credit.

Do I qualify for the Nonrefundable Renter's Credit?

You qualify for the Nonrefundable Renter's Credit if you meet all of the following criteria:
  • You were a resident of California for at least 6 full months during 2013.
  • Your California adjusted gross income (AGI) is $36,955 or less if your filing status is Single or Married Filing Separately or $73,910 or less if you are Married Filing Jointly, Head of Household, or Qualified Widow(er).
  • You paid rent for at least half of 2013 for property in California that was your principal residence.
  • You did not live with another person for more than half the year (such as a parent) who claimed you as a dependent in 2013.
  • You are not a minor living with and under the care of a parent, foster parent, or legal guardian.
  • You rented property for more than half the year that was not exempt from California property tax in 2013.
  • Neither you nor your spouse, if married, was granted a homeowner's property tax exemption during 2013. (You can still qualify for the credit, even though your spouse claimed a homeowner's exemption, as long as each of you maintained a separate residence for the entire year in 2013).

How are contributions to the Seniors Special Fund used?

Contributions made to this fund will be distributed to the Area Agency of Aging Councils (TACC) to provide advice on and sponsorship for senior citizens issues. Any excess contributions not required by TACC will be distributed to senior citizen service organizations throughout California for meals, adult day care, and transportation.

How are contributions to the Alzheimer's Disease / Related Disorders Fund used?

Contributions will be used to provide grants to California scientists to study Alzheimer's disease and related disorders. This research includes basic science, diagnosis, treatment, prevention, behavioral problems, and caregiving.

How are contributions to the Fund for Senior Citizens used?

Contributions will provide support for the California Senior Legislature (CSL). The CSL is made up of volunteers who develop statewide senior-related legislative proposals in areas of health, housing, transportation, and community services to be presented to the State Legislature.

How are contributions to the Rare & Endangered Species Preservation Fund used?

Contributions will be used to help protect and conserve California's many threatened and endangered species along with the wild lands that they need to survive, for the enjoyment and benefit of you and future generations of Californians.

How are contributions to the State Children's Trust Fund for the Prevention of Child Abuse used?

Contributions will be used to fund programs in California for the prevention, intervention, and treatment of child abuse and neglect.

How are contributions to the Breast Cancer Research Fund used?

Contributions will fund research toward preventing and curing breast cancer. Breast cancer is the most common cancer to strike women in California. It kills 4,000 California women each year. Contributions also fund research on prevention and better treatment and keep doctors up-to-date on research progress.

How are contributions to the Firefighters' Memorial Fund used?

Contributions will be used for the repair and maintenance of the California Firefighters' Memorial on the grounds of the State Capitol, ceremonies to honor the memory of fallen firefighters, to assist surviving loved ones, and for an informational guide detailing survivor benefits to assist the spouses and children of fallen firefighters.

How are contributions to the Emergency Food for Families Fund used?

Contributions will be used to help local food banks feed California's hungry. Your contribution will fund the purchase of much-needed food for delivery to food banks, pantries, and soup kitchens throughout the state. The State Department of Social Services will monitor its distribution to ensure the food is given to those most in need.

How are contributions to the Peace Officer Memorial Foundation Fund used?

Contributions will be used to preserve the memory of California's fallen peace officers and assist the families they left behind. The nonprofit charitable organization, California Peace Officers' Memorial Foundation, has accepted the privilege and responsibility of maintaining a memorial for fallen officers on the State Capitol grounds.

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