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California Research Credit
Extracted from PDF file 2023-california-form-3523.pdf, last modified November 2023Research Credit
TAXABLE YEAR 2023 CALIFORNIA FORM 3523 Research Credit Attach to your California tax return. ◻ SSN or ITIN ◻ CA Corporation no. ◻ FEIN Name(s) as shown on your California tax return California Secretary of State file number Part I Credit Computation. Read the instructions before completing this form. Section A Regular Credit. If you are electing the Alternative Incremental Credit, skip this section and go to Section B. Line 1 through line 4 are to be completed only by corporations (other than S corporations, personal holding companies, and service organizations). Individuals, S corporations, estates, trusts, partnerships, and limited liability companies (LLCs), begin on line 5. 1 Basic research payments paid or incurred during the taxable year. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 00 2 Base period amount. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 00 3 Subtract line 2 from line 1. If less than zero, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 00 4 Multiply line 3 by 24% (.24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 00 5 Wages for qualified services. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 00 6 Cost of supplies. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 00 7 Rental or lease costs of computers. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 00 8 Enter the applicable percentage of contract research expenses. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 00 9 Total qualified research expenses. Add line 5 through line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 00 10 Enter fixed-base percentage, but not more than 16% (.16). See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 % 11 Enter average annual gross receipts. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 00 12 Base amount. Multiply line 11 by the percentage on line 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 00 13 Subtract line 12 from line 9. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 00 14 Multiply line 9 by 50% (.50). See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 00 15 Enter the smaller of line 13 or line 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 00 16 Multiply line 15 by 15% (.15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 00 Qualified research expenses paid or incurred. 17 a Regular credit. Add line 4 and line 16. If you do not elect the reduced credit under IRC Section 280C(c), enter the result here, and see instructions for the schedule to attach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b Reduced regular credit under IRC Section 280C(c). Multiply line 17a by the applicable percentage below: • 87.7% (.877) for individuals, estates, and trusts • 91.16% (.9116) for corporations • 98.5% (.985) for S corporations Enter the reduced credit amount. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . For Privacy Notice, get FTB 1131 EN-SP. 7311233 17a 00 17b 00 FTB 3523 2023 Side 1 Section B Alternative Incremental Credit. Skip this section if you completed Section A, Regular Credit. Line 18 through line 21 are to be completed only by corporations (other than S corporations, personal holding companies, and service organizations). Individuals, S corporations, estates, trusts, partnerships, and LLCs, begin on line 22. 18 Basic research payments paid or incurred during the taxable year. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 19 Base period amount. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 20 Subtract line 19 from line 18. If less than zero, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 21 21 Multiply line 20 by 24% (.24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 00 00 00 00 Qualified research expenses paid or incurred. 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 22 Wages for qualified services. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Cost of supplies. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Rental or lease costs of computers. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Enter the applicable percentage of contract research expenses. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Total qualified research expenses. Add line 22 through line 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Enter average annual gross receipts. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Multiply line 27 by 1% (.01) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Subtract line 28 from line 26. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Multiply line 27 by 1.5% (.015) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Subtract line 30 from line 26. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Subtract line 31 from line 29. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Multiply line 27 by 2% (.02) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Subtract line 33 from line 26. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Subtract line 34 from line 31. If zero or less, enter -0-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Multiply line 32 by 1.49% (.0149) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Multiply line 35 by 1.98% (.0198) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Multiply line 34 by 2.48% (.0248) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 a Alternative incremental credit. Add line 21, line 36, line 37, and line 38. If you do not elect the reduced credit 39a under IRC Section 280C(c), enter the result here, and see instructions for the schedule that must be attached . . . . . . . b Reduced alternative incremental credit under IRC Section 280C(c). Multiply line 39a by the applicable percentage below: • 87.7% (.877) for individuals, estates, and trusts • 91.16% (.9116) for corporations • 98.5% (.985) for S corporations 39b Enter the reduced credit amount. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section C 00 00 Available Research Credit 40 40 Pass-through research credit(s) from S corporations, estates, trusts, partnerships, and LLCs. See instructions . . . . . . . . 41 Current year research credit. If you did not elect the reduced credit under IRC Section 280C(c), add line 17a or line 39a to line 40 and enter the result here. If you elected the reduced credit under IRC Section 280C(c), 41 add line 17b or line 39b to line 40 and enter the result here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Enter the amount of credit on line 41 that is from passive activities. If none of the amount on line 41 is from passive activities, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 43 Subtract line 42 from line 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 44 Enter the allowable credit from passive activities. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 45 Non-passive activity credit carryover from prior year. (Do not include credits received through assignment.) 45 See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 46 Total. Add line 43 through line 45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part II 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 Carryover Computation. Combined Report Filers see instructions for Part III before completing this part. 47 Credit claimed. Enter the amount of the credit claimed on the current year tax return. See instructions. (Do not include any assigned credit claimed on form FTB 3544, Part B.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 00 48 Total credit assigned. Enter the total amount from form FTB 3544, Part A, column (g). If you are not a corporation, enter -0-. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 00 49 Credit carryover available for use or assignment for future years. Subtract lines 47 and 48 from line 46 . . . . . . . . . . . . . . 49 00 Side 2 FTB 3523 2023 7312233 Part III Credit Allocation and Carryover Per Entity – Only Combined Report Filers To make an election for assigning credits, you must also complete form FTB 3544, Part A. Otherwise, the assignment indicated here will be invalid. Credit Generated and Assigned Per Entity (a) Corporation (b) Corporation no., FEIN, or SOS no. (c) Amount of credit generated in current year (f) Amount of credit from col. (e) claimed in current year return. (Do not include any assigned credit claimed on form FTB 3544, Part B.) (g) Amount of research credit assigned and to be reported on form FTB 3544, Part A (h) Generated credit carryover for future years col. (e) – [col. (f) + col. (g)] (d) Amount of generated credit carryover from prior years (e) Total of generated credit and credit carryover from prior years col. (c) + col. (d) 1 2 3 4 5 6 7 Total 1 2 3 4 5 6 7 Total 7313233 FTB 3523 2023 Side 3
2023 Form 3523 Research Credit
More about the California Form 3523 Corporate Income Tax Tax Credit TY 2023
It is required for you to attach this form with your California tax return. This form contains areas for you to fill out relating to credit computation, carryover computation, and credit allocation and carryover per entity filled out.
We last updated the Research Credit in January 2024, so this is the latest version of Form 3523, fully updated for tax year 2023. You can download or print current or past-year PDFs of Form 3523 directly from TaxFormFinder. You can print other California tax forms here.
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TaxFormFinder has an additional 174 California income tax forms that you may need, plus all federal income tax forms.
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| 3805-Z Booklet | Enterprise Zone Business Booklet |
| Form 100-ES | Corporation Estimated Tax |
| Form 541 Schedule K-1 | Beneficiary's Share of Income, Deductions, Credits, etc. |
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| Form 3537 (LLC) | Payment for Automatic Extension for LLCs |
View all 175 California Income Tax Forms
Form Sources:
California usually releases forms for the current tax year between January and April. We last updated California Form 3523 from the Franchise Tax Board in January 2024.
Form 3523 is a California Corporate Income Tax form. States often have dozens of even hundreds of various tax credits, which, unlike deductions, provide a dollar-for-dollar reduction of tax liability. Some common tax credits apply to many taxpayers, while others only apply to extremely specific situations. In most cases, you will have to provide evidence to show that you are eligible for the tax credit, and calculate the amount of the credit to which you are entitled.
About the Corporate Income Tax
The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.
Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).
Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.
Historical Past-Year Versions of California Form 3523
We have a total of thirteen past-year versions of Form 3523 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
2023 Form 3523
2023 Form 3523 Research Credit
2022 Form 3523
2022 California Form 3523 Research Credit
2021 Form 3523
2021 California Form 3523 Research Credit
2020 Form 3523
2020 Form 3523 Research Credit
2019 Form 3523
2019 California Form 3523 Research Credit
2018 Form 3523
2018 Form 3523 - Research Credit
2017 Form 3523
2017 California Form 3523 Research Credit
2016 Form 3523
2016 Form 3523 Research Credit
2015 Form 3523
2015 Form 3523 -- Research Credit
2014 Form 3523
2014 Form 3523 -- Research Credit
2013 Form 3523
2013 Form 3523 -- Research Credit
2012 Form 3523
2012 Form 3523
2011 Form 3523
2011 Form 3523 -- Research Credit
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