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Changes to 2006 Form

2006 Updates to Form 3553-Enterprise Zone Employee Credit

Revision Date: 04/04/2007

Revision Details: Since some of the enterprise zones areas were expired in December 2006 and some of the enterprise zones areas were conditionally designated, we need to add new procedure to keep the taxpayer informed in regard to this issue. Our instructions currently use the incorrect name for one of the enterprise zone designations; therefore, we are revising the instructions with the correct name. Currently, any unused EZ employee credit may not be carried over to succeeding years. Also, the EZ NOL carryover is not allowed for employee.

FTB 3553 flat, page 1, and page 542 of the Package X

  • Page 1, column 2, new paragraph in the What's New section after Expiring Zones section:

It should read:

Filing of Form FTB 3553

If you are working at a business located in an expired zone and in a conditionallydesignated zone, file one form FTB3553 for the expired zone and another form FTB 3553 forthe conditionally designated zone, to claim the enterprise zone (EZ) credits. The credit from an expired zone can only offset against the tax on wage income earned in the expiredzone. The credit generated from a conditionally designated zone can only offset againstthe tax on wage income earned in the conditionally designated zone. The amount of creditis limited by the amount of tax (line 13 of FTB 3553) on wage income earned within eachEZ. But the total amount of credits generated from income earned within all EZs shouldnot exceed the tax amount on line 24 of Form 540 or line 27 of Long Form 540NR.

For an expired zone, use form FTB 3553 to report the employee credit on the wages earned while working in the enterprise zone, to the day the zone expired. For a conditionally designated zone, use form FTB 3553 to report the employee credit onthe wages earned while working in the new conditionally designated zone.

  • Page 1, column 1 under List of 2006 Conditionally Designated Zones in the What's new section:

It should read:

Northern Sacramento

  • Page 1, column 2 under Expiring Zones section, 1st paragraph, 4th sentence:

The following sentence will be deleted:

Any EZ credit carryover or EZ net operating loss carryover can continue to be utilized to the extent of business income attributable to the former zones.

The revised internet version is available for download.


Revision Date: 01/18/07

Revision Details: Enterprise Zone Employee Credit Instructions

  • Revision on Page 1, first column, table titled "Los Angeles Region" updates the Los Angeles Region's information to be consistent with how Housing and Community Development will present their information.

It should read:

First column: Los Angeles Second column: East Valley, Hollywood, Central L.A.

This revision does have tax impact.
The revised internet version is available for download.

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