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Changes to 2009 Forms

Updates to the 100 Booklet on 02/13/2014 –– Corporation Tax Booklet

We replaced text on:

  1. Page 1, cover page, "This booklet contains" section
  2. Page 2, Table of Contents
  3. Page 4, Column 3, under “California law does not conform to federal law” list
  4. Page 5, Column 1, after "Records Maintenance Requirements" section
  5. Pages 35 and 36, replace blank pages with Form 3565 and Instructions

Previous Version

  1. Note: new text added.
  2. Note: new text added.
  3. Note: new text added.
  4. Note: new text added.
  5. THIS PAGE INTENTIONALLY LEFT BLANK
    Visit our website:
    ftb.ca.gov

Revised Version

  1. FTB 3565, Small Business Stock Questionnaire
  2. FTB 3565, Small Business Stock Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
    Instructions for form FTB 3565 . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 36
  3. The changes in the percentage of the gain exclusion for the sale of qualified small business stock acquired after February 17, 2009.
  4. Small Business Stock Questionnaire
    An information questionnaire, form FTB 3565, Small Business Stock Questionnaire, is included in this booklet. The purpose of this questionnaire is to provide information regarding an issuance of stock pursuant to R&TC Section 18152.5. Corporations that issue stock intended to be qualified small business stock are required to attach form FTB 3565 to Form 100. See the instructions for form FTB 3565 for more information.
  5. Note: replaced two blank pages with Form 3565 and Instructions on Pages 35 and 36.

Reason for the changes

AB 1412 (Stats.2013, ch. 546), signed by the Governor on October 4, 2013, retroactively allows the Qualified Small Business Stock (QSBS) deferral and 50 percent gain exclusion for tax years 2008 through 2012.

Impact

No tax impact.

Back to Tax Form Changes for 2009


Updates to the 100 Booklet on 01/25/2013 –– Corporation Tax Booklet

We replaced text on:

  1. Page 1, cover page
  2. Page 2, under Table of Contents
  3. Page 3, under What’s New/Tax Law Changes section, Column 2
  4. Page 5, Columns 1 and 2
  5. Pages 35 and 36, Form 3565 and Instructions
  6. Page 47, Column 2, under California Tax Forms and Publications

Previous Version

  1. FTB 3565, Small Business Stock Questionnaire
  2. FTB 3565, Small Business Stock Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
    Instructions for form FTB 3565 . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 36
  3. Qualified Small Business Stock – California law does not conform to federal law in regard to the increase in the percentage (from 50% to 75%) of the gain exclusion for the sale of qualified small business stock acquired after February 17, 2009, and before January 1, 2011. Current California law allows an exclusion of 50% of any gain from the sale or exchange of qualified small business stock held for more than 5 years.
  4. Small Business Stock Questionnaire
    An information questionnaire, form FTB 3565, Small Business Stock Questionnaire, is included in this booklet. The purpose of this questionnaire is to provide information regarding an issuance of stock pursuant to R&TC Section 18152.5. Corporations that issue stock intended to be qualified small business stock are required to attach form FTB 3565 to Form 100. See the instructions for form FTB 3565 for more information.
  5. Form 3565 and Instructions were on Pages 35 and 36.
  6. FTB 3565, Small Business Stock Questionnaire

Revised Version

  1. Note: text deleted.
  2. Note: text deleted.
  3. Note: text deleted.
  4. Note: text deleted.
  5. Form 3565 and Instructions were eliminated. In their place, we added the text below on Pages 35 and 36:
    THIS PAGE INTENTIONALLY LEFT BLANK
    Visit our website:
    ftb.ca.gov
  6. Note: text deleted.

Reason for the changes

The Court of Appeal’s held in Cutler v. Franchise Tax Board (2012) 208 Cal. App. 4th 1247, that the qualified small business stock exclusion and deferral statutes under California Revenue and Taxation Code (R&TC) Sections 18152.5 and 18038.5 are unconstitutional. These sections are now invalid and unenforceable.

Impact

No tax impact.

Back to Tax Form Changes for 2009


Updates to the instructions on the 100 Booklet on 08/19/2010 –– Corporation Tax Booklet

We replaced text on the 100 Booklet’s instructions on:

  1. Page 3, Column 2, Backup Withholding paragraph
  2. Page 4, Column 2, first bullet
  3. Page 4, Column 1, fifth bullet
  4. Page 4, Column 2, under the "CA law conforms to federal law" section

Previous Version

  1. Backup Withholding – For taxable years beginning on or after January 1, 2010, California tax law requires backup withholding at a rate of 7% on reportable payments. Interest, dividends, and any release of loan funds made by a financial institution in the normal course of business are excluded from California backup withholding. For additional information on California backup withholding, go to ftb.ca.gov and search for backup withholding.
  2. For taxable years beginning on or after January 1, 2009, buyers will be required to withhold on each installment sale payment if the sale of California real property is structured as an installment sale.
  3. A controlled foreign corporation (CFC) must include in a water’s-edge combined report a portion of its income based on the ratio of its Subpart F income bears to the current year earnings and profits, and its U.S. source income, regardless of whether the CFC is a California taxpayer.
  4. N/A: We are adding additional language because of the Conformity Act of 2010 (SB 401).

Revised Version

  1. Backup Withholding - Beginning on or after January 1, 2010, with certain limited exceptions, payers that are required to withhold and remit backup withholding to the Internal Revenue Service (IRS) are also required to withhold and remit to the Franchise Tax Board (FTB). The California backup withholding rate is 7% of the payment. For California purposes, dividends, interests, and any financial institutions release of loan funds made in the normal course of business are exempt from backup withholding.

    If the corporation (payee) has backup withholding, the corporation (payee) must contact the FTB to provide a valid Taxpayer Identification Number, which is either the California corporation number or the federal employer identification number (FEIN), before filing the tax return. Failure to provide the California corporation number or FEIN may result in a denial of the backup withholding credit. For more information, go to ftb.ca.gov and search for backup withholding.

  2. For installment sales occurring on or after January 1, 2009, buyers will be required to withhold on each installment sale payment if the sale of California real property is structured as an installment sale.
  3. N/A: Text deleted.
  4. The federal grant tax treatment for specified energy property.

Reason for the changes

  1. ABX 4 18 was chaptered on July 28, 2009 and revised the law regarding backup withholding.  We are revising the 2009 backup withholding paragraph to:
    1. Correct the effective date of backup withholding to be “Beginning on or after January 1, 2010”, instead of “For taxable years beginning on or after January 1, 2010”.
    2. Provides the corporation with additional instructions to follow to correctly report the backup withholding.
  2. AB 3078 was chaptered on September 28, 2008 and revised the law regarding installment sale. We are revising the 2009 installment sale paragraph to correct the effective date to be “For installment sales occurring on or after January 1, 2009”, instead of “For taxable years beginning on or after January 1, 2009”.
  3. We removed the CFC paragraph because this paragraph does not apply to C corporations that file Form 100 and the CFC paragraph was as an FYI for corporations.
  4. The Conformity Act of 2010 (SB 401) placed California in conformity with federal law to exclude from gross income and alternative minimum taxable income any federal grant received for specified energy property.

Impact

  1. No tax impact.  This revision will allow payers to perform backup withholding and payee to claim the withholding credit beginning on or after January 1, 2010, instead of for taxable years beginning on or after January 1, 2010. 
  2. No tax impact.  This revision will allow buyers to withhold for installment sales occurring beginning on or after January 1, 2009, instead of for taxable years beginning on or after January 1, 2009.
  3. N/A (Nontechnical revision)
  4. If a taxpayer excluded the federal specified energy property grant from the gross income for federal purposes and included it in the gross income for CA purposes, a taxpayer will overstated its CA gross income. This revision will allow a taxpayer to exclude the federal grant amount from CA gross income; thus, will reduce the tax liability.

Updates to the 100 Booklet on 03/24/2010 –– Corporation Tax Booklet

We replaced text on the 100 Booklet on:

  1. Page 3, Instructions, Column 1, under What’s New/Tax Law Changes section
  2. Page 3, Instructions, Column 3, under Important Information section

Previous Version

  1. N/A (We will add a new paragraph under What’s New section.)
  2. For taxable years beginning on or after January 1, 2008, and before January 1, 2010, business tax credits can only offset 50% of the tax if the corporation’s taxable income is $500,000 or more. Corporations with taxable income less than $500,000 are not subject to the credit limitation. For the purpose of this limitation, taxable income means net income for state purposes, line 19 of Form 100, California Corporation Franchise or Income Tax Return. The limitation is equal to 50% of the tax before the application of any credits. Exception: The Prior Year Alternative Minimum Tax (AMT) Credit and the New Jobs Credit are not subject to the 50% business tax credit limitation.

    Business tax credits disallowed due to the 50% limitation may be carried over. The carryover period for disallowed credits are extended by the number of taxable years the credits were not allowed.

Revised Version

  1. Charitable Contributions for 2010 Haiti Disaster - California law conforms to the federal law which allows a 2009 charitable contribution deduction for cash contributions made after January 11, 2010, and before March 1, 2010, for the relief of victims in areas affected by the earthquake in Haiti on January 12, 2010. Corporations may claim the deduction on the 2009 or 2010 California tax return. Corporations may choose to claim the deduction in different taxable years for federal and California purposes.
  2. For taxable years beginning on or after January 1, 2008, and before January 1, 2010, business tax credits can only offset 50% of the tax if the corporation’s taxable income is $500,000 or more. For more information, see Specific Line Instructions, Line 26 through Line 27-Tax credits.

Reason for the changes

  1. On March 15, 2010 California passed AB 347 which conforms to the new federal law that allows corporations to deduct the 2010 cash contributions for Haiti relief on the 2009 or 2010 California tax return.
  2. We revised the existing credit limitation paragraph to allow room for the Haiti Charitable Contributions What’s New paragraph. The previous version of the credit limitation paragraph is also listed under Specific Line Instructions, Line 26 through Line 27.

Impact

  1. If a corporation chooses to claim the cash contributions deduction in the 2009 taxable year, it may reduce the 2009 tax liability.
  2. There is no tax impact.

Back to Tax Form Changes for 2009