3461: California Limitation on Business Losses (2025)
California · FTB · Used for tax years 2025
California Form 3461 calculates the limitation on business losses for 2025. It combines income and loss items, adjusts for amounts not attributable to a trade or business, and determines any excess business loss carryforward and income adjustment.
Who files this form
Use Form 3461 to calculate your California excess business loss for 2025. The form directs you to attach it to your California tax return, unless line 16 is zero or greater.
If line 16 is zero or greater, you do not have an excess business loss and should not attach the form. If line 16 is negative, that amount is your 2025 excess business loss to carry forward to 2026.
What you'll need
Have these items available to complete the form:
- Your California tax return, including the name(s) and SSN or ITIN shown on it.
- Schedule CA (540), if you file Form 540. Form 3461 uses amounts from Part I, Section A, line 7a, and Section B, lines 3 through 6.
- Amounts for other trade or business income, gains, or losses not already reported on lines 1 through 6.
- Amounts for any income, gains, losses, or deductions included on lines 1 through 8 that are not attributable to a trade or business.
- Prior-year excess business loss carryover amounts and prior-year Schedule CA (540) excess business loss adjustments included as income, if applicable.
How to file
Attach Form 3461 to your California tax return if line 16 is negative. Do not attach it if line 16 is zero or greater.
The form does not provide a mailing address or e-filing directions. If you file a return other than Form 540, it directs you to see the instructions, which are not included in the supplied text.
Common mistakes
- Attaching the form when line 16 is zero or greater. The form specifically says not to attach it in that case.
- Copying line 16 directly to Schedule CA (540) when you have a carryover on line 14b. Instead, follow line 17 to determine the adjustment.
- Using the wrong sign. Line 13 reverses the sign of line 12. Any excess business loss adjustment entered on Schedule CA (540), Part I, Section B, line 8p, column C, is entered as a positive number.
- Using the Form 540 directions for another return without checking the instructions. The form repeatedly directs filers of other returns to see the instructions.
Questions people ask
What amount goes on line 15 for 2025?
Enter $313,000, or $626,000 if married/RDP filing jointly.
What happens to my 2025 excess business loss?
If line 16 is negative, that amount is your 2025 excess business loss to be carried forward to 2026.
Where do I report the adjustment if I have no prior-year carryover?
If line 14b has no amount and line 16 is negative, enter the line 16 amount as a positive number on Schedule CA (540), Part I, Section B, line 8p, column C. This is your 2025 excess business loss adjustment included as income.
What if I have an excess business loss carryover from prior years?
Enter it on line 14b and follow line 17 rather than copying line 16 directly to Schedule CA (540). If the positive line 16 amount exceeds the excess business loss adjustment included as income in prior years, line 17 tells you to subtract those prior-year adjustments. If it is less, the form says you have no excess business loss adjustment for 2025.