2024 California State Tax Credit Deadlines
In California, you may:
- File your taxes online for free via CalFile
- When filing by mail, ensure that your documents are postmarked by the due date.
- Federal filing is not required.
- Amendments are allowed up to 3-years from the original date of filing.
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Overview, Eligibility, and Limitations
Research Credit Program
The basic and qualified research must have been conducted within California.
The R&D tax credit equals:
- 15% of the excess of California qualified research expenses for the taxable year over the base period research expenses.
- 24% of basic research expenses for university-based research for the taxable year.
If your business is conducted both within and outside of California, for purposes of determining the base amount, gross receipts are the receipts from the sale of property that is held primarily for sale to customers (in the ordinary course of your trade or business) and that is delivered or shipped to customers in California.
Eligible Entities
- C-Corporations, S-Corporations, LLCs, Partnerships
Credit Limitations
This credit cannot reduce the minimum franchise tax (C-Corp/S-Corp), annual tax (Partnerships and QSUB), alternative minimum tax (C-Corp, exempt organizations, individuals, and fiduciaries), built-in gains tax (S-Corp), or excess net passive income tax (S-Corp).
QSUB - Qualified Subchapter S Subsidiary
Credit Carryforward
If the available credit exceeds the current year tax liability, the unused credit can be carried over to succeeding years until exhausted. Apply the carryover to the earliest taxable year.
Credits cannot be carried back to prior tax years.
The research credit is not refundable.
S-Corporation / Partnership
You must file in California by March 15, 2025.
Applicable R&D Forms
- Form CA 3523 – Research Credit
File the above form with the following tax forms:
- Form 100S – California S-Corp Franchise or Income Tax Return
- Form 565 – Partnership Return of Income
- Form 568 – Limited Liability Company Return of Income
Extension to File Taxes in California for 2024
- Taxes owed in California for the tax year 2024 must be paid by March 15, 2025.
- No separate extension filing is required in California.
- California automatically grants a 6-month extension for S-Corporation tax returns and a 7-month extension for Partnership tax returns.
- S-Corporation: the extension deadline is September 15, 2025.
- Partnership: the extension deadline is October 15, 2025.
- Note that this extension pertains to the filing deadline, not the payment deadline.
- Payment of taxes owed is still due by March 15, 2025.
S-Corporation Additional Benefits
S-Corporations may claim an additional entity level benefit of 1/3 of the research credit calculated for the period against the 1.5% entity-level tax after applying the limitations relating to passive activity losses and credits.
- However, S-Corporations are not eligible for the “basic research” credit. (IRC §41(e)(7)(E)(i)) S-Corporations can pass through 100% of this credit to their shareholders on a pro-rata basis.
The amount of research credit passed through to the shareholder on the Schedule K-1 may be limited to the amount of tax attributable to the shareholder’s interest in the S-Corporation (IRC §41(g)).
- To determine the shareholder’s credit limitation, see FTB Form 3523 – Line 40 instructions.
C-Corporation
You must file in California by April 15, 2025.
Applicable R&D Forms
- Form CA 3523 – Research Credit
File the above form with the following tax forms:
- Form 100 – California Corporation Franchise or Income Tax Return
- Taxes owed in California for the tax year 2024 must be paid by April 15, 2025.
- No separate extension filing is required in California.
- California automatically grants an extension for C-Corporation tax returns.
- Tax Year 2019 and later - 15th day of the 11th month after the close of the tax year.
- Extension to File Taxes in California for 2024
- Note that this extension pertains to the filing deadline, not the payment deadline.
- Payment of taxes owed is still required by April 15, 2025.
Sole-Proprietorship
You must file in California by April 15, 2025.
Applicable R&D Forms
- Not eligible
These are the forms when filing a tax return as a Sole-Proprietor
- Form 540 – Full Year Residents
- Form 540NR – Part Year or Non-Resident
Extension to File Taxes in California for 2024
- Taxes owed in California for the tax year 2024 must be paid by April 15, 2025.
- No separate extension filing is required in California.
- California automatically grants a 6-month extension for individual tax returns.
- Sole-Proprietorship: the extension deadline is September 15, 2025.
- Note that this extension pertains to the filing deadline, not the payment deadline.
- Payment of taxes owed is still due by April 15, 2025.
References
- California - Individual Filing Information
- California - Corporation and Partnership Filing Information
- California - Franchise Tax Board Forms
- California Research Credit - 2023 Instructions for Form FTB 3523 | FTB.ca.gov
- California Research Credit - 2023 Form 3523 Research Credit | FTB.ca.gov
We strive to ensure the accuracy of the information on this page, but it is not intended as tax or legal advice. Please use your own professional judgment and consult with a tax professional. Any advice you provide in connection with tax return preparation must comply in full with the requirements of IRS Circular 230.
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