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Changes to 2007 Form

Updates to the 2007 Instructions for the Schedule P (540NR) -- Alternative Minimum Tax and Credit Limitations - Nonresidents and Part-Year Residents

The revised Internet version is available for download as of 01/22/2009

Revision Details:

Corrected Line 15 reference (located in second bolded heading under How to Claim Your Credits, Schedule P instructions, Page 7), to read as Line 16. This clarifies that the A1, A2, B2, and B3 credits should be entered on the Form 540NR, Line 32 and/or Line 33.

Line 15, a B1 credit, refers to the Nonrefundable Renters Credit, which has its own separate set of instructions.

  • Schedule P (540NR) Instructions, Side 7, Column 1, How to Claim Your Credits, Paragraph 2.

Previously read:

Credits from Part III, Line 4 through Line 10 and Line 15 through Line 21

Revised to:

Credits from Part III, Line 4 through Line 10 and Line 16 through Line 20


Updates to 2007 Schedule P (540NR) – Alternative Minimum Tax and Credit Limitations – Nonresidents or Part-Year Residents

The revised Internet version is available for download as of 02/14/2008:

Revision Details:

1) We instruct the taxpayer to use their 2005 disallowed investment interest expense, when the taxpayer should be using their 2006 disallowed investment interest expense.
2) We instruct the taxpayer to use line 9 of the Itemized deduction worksheet that is part of line 42 instructions, however line 9 is apart of line 43 instructions. Line 42 does not have instructions.
3) We instruct the taxpayer that the Exemption Worksheet is on the next page, when the worksheet is right under this statement.
4) We instruct the taxpayer that the Exemption Worksheet is on the next page, when the worksheet is right under this statement.
5) We instruct the taxpayer to complete Schedule P(540NR), Part III, line 12, when the taxpayer should be completing line 11 if the taxpayer has a credit in Section B. Code 170 in the Schedule P (540NR) credit table instructed the taxpayer that they could claim this credit in section A2, however, the credit should be claimed in section B1.

This update is located on

1) Page 2 of the instructions, column 2, 2nd to the last bullet item of flat
2) Page 5 of the instructions, column 2, line 18 – Itemized deductions limitations of flat
3) Page 6 of the instructions, column 1, line 22 – Exemption amount of flat
4) Page 6 of the instructions, column 1, line 22 – Children Under Age 14 of flat
5) Page 6 of the instructions, column 2, Part III, To complete Part III, 3rd bullet of flat
6) Page 7 of the instructions, credit table, code 170, Joint Custody Head of Household and page
708, 711, 712, & 713 of the Package X

  • 1)

Previously read:

When entering your 2005 disallowed investment interest expense on line 2, use your 2005 AMT disallowed investment interest expense.

Revised to:

When entering your 2006 disallowed investment interest expense on line 2, use your 2006 AMT disallowed investment interest expense.

  • 2)

Previously read:

Line 18 – Itemized deductions limitation If you itemized deductions and your federal AGI is more than the amount shown on line 18, your itemized deductions were limited for regular tax. For the AMT, this limitation does not apply. Enter the amount from line 9 of the Itemized Deductions Worksheet in the instructions for Schedule CA (540NR), Part III, line 42.

Revised to:

Line 18 – Itemized deductions limitation If you itemized deductions and your federal AGI is more than the amount shown on line 18, your itemized deductions were limited for regular tax. For the AMT, this limitation does not apply. Enter the amount from line 9 of the Itemized Deductions Worksheet in the instructions for Schedule CA (540NR), Part III, line 43.

  • 3)

Previously read:

Line 22 – Exemption amount If line 21 is more than the amount shown for your filing status in the middle column of the chart on line 22, complete the Exemption Worksheet on the next page to figure the amount to enter on line 22.

Revised to:

Line 22 – Exemption amount If line 21 is more than the amount shown for your filing status in the middle column of the chart on line 22, complete the Exemption Worksheet below to figure the amount to enter on line 22.

  • 4)

Previously read:

Children Under Age 14. If this form is for a child under age 14, complete the Exemption Worksheet on the next page.

Revised to:

Children Under Age 14. If this form is for a child under age 14, complete the Exemption Worksheet below.

  • 5)

Previously read:

If you have a credit(s) in Section B, be sure to complete line 12 in addition to the line(s) for your credit(s).

Revised to:

If you have a credit(s) in Section B, be sure to complete line 11 in addition to the line(s) for your credit(s).

  • 6)

Previously read:

170 Joint Custody Head of Household * Worksheet A2

Revised to:

170 Joint Custody Head of Household* Worksheet B1

1) The revision could increase or decrease tax liability depending if the taxpayer’s disallowed amount for 2006 is larger or smaller than in 2005 or how large the amount is.
2) This revision has no impact because the reference to line 9 is still correct. If the taxpayer follows our instructions, the taxpayer still will complete the form correctly.
3) This revision would have no tax impact for exemption amount.
4) This revision would have no tax impact for children under age 14.
5) This revision would have minimal tax impact to taxpayer completing line 11.
This revision would have no tax impact to taxpayer claiming the Joint Custody Head of Household credit.

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