3547: Donated Agricultural Products Transportation Credit (2024)

Who files this form

Use Form FTB 3547 to figure the credit for transporting agricultural products donated to nonprofit charitable organizations. To qualify for costs you paid or incurred, you must be in the business of processing, distributing, or selling agricultural products.

You also use this form to claim pass-through credits from S corporations, estates, trusts, partnerships, or LLCs treated as partnerships.

Those entities should complete Form FTB 3547 to figure the credit passed through to their shareholders, beneficiaries, partners, or members.

What you'll need

• Donation certificate: You must receive a certificate from the nonprofit charitable organization confirming that the donation complies with the California Food and Agricultural Code. Keep it and provide a copy to the Franchise Tax Board if requested.
• Transportation cost information: Have the eligible miles or actual transportation expenses available to calculate line 1.
• Pass-through credit information, if applicable: Use Schedule K-1 (100S, 541, 565, or 568). Attach a schedule showing the names and identification numbers of the entities that passed credits through to you.
• Prior-year carryover amount, if applicable: Enter this on line 5.
• Additional forms, if applicable: Corporations assigning credits must complete Form FTB 3544, Part A. A taxpayer electing future refundable treatment for credits disallowed by the business credit limitation must complete Form FTB 3870.

How to file

Attach Form FTB 3547 to your California tax return. Use credit code 204 when claiming this credit.

S corporations, estates, trusts, partnerships, and LLCs classified as partnerships attach it to Form 100S, 541, 565, or 568, as applicable. Show each recipient’s pass-through credit on Schedule K-1.

If you elect future refundable treatment using Form FTB 3870, attach the completed form to your original, timely filed tax return.

The supplied text does not give a mailing address or e-filing directions.

Common mistakes

• Including excluded costs: Do not include depreciation or insurance in transportation costs. Qualifying travel must not involve a significant element of personal pleasure, recreation, or vacation.
• Claiming the same costs without adjusting a deduction: Reduce any deduction allowed for the same transportation costs by the current-year credit figured on line 4.
• Including assigned credits on line 7a: Do not include assigned credits claimed on Form FTB 3544, Part B. If you are not a corporation, enter 0 on line 7b.
• Carrying the credit backward: Unused credit cannot be applied to a prior year. Apply carryovers to the earliest taxable year possible.
• Making an incorrect refundable-credit election: Do not include credit limited by your tax liability on line 7c. You cannot elect only part of the credit disallowed by the $5,000,000 limitation, and you must make the same election for all other credits claimed that year and disallowed by that limitation.
• Double-counting elected amounts: Enter the line 7c amount on Form FTB 3870, line 1, column (c), and exclude amounts elected as refundable from the carryover on line 8.

Questions people ask

How much is the credit?

The credit is 50% of eligible transportation costs paid or incurred. If multiple taxpayers share the costs, each receives credit in proportion to their share of the expenses.

How do I calculate eligible transportation costs?

Use either $0.14 per mile for miles connected with transporting the donated products or actual eligible transportation expenses. Parking fees and tolls may be included in actual costs, but depreciation and insurance may not.

What products and charities qualify?

Agricultural products include any fowl, animal, vegetable, or other product or article that is customary or proper food for people. The receiving charitable organization must have exempt status under IRC Section 501(c)(3) or California Revenue and Taxation Code Section 23701d.

Can I carry unused credit forward?

Yes. If the available credit exceeds your current-year tax liability, unused credit may be carried forward until exhausted. Use it in the earliest taxable year possible. It cannot be carried back.

Is the credit refundable?

The credit is generally not refundable. For taxable years beginning on or after January 1, 2024, and before January 1, 2027, credits disallowed by the $5,000,000 business credit limitation may qualify for an irrevocable election using Form FTB 3870. The elected amount is refundable at 20% per year over five years, starting in the third taxable year after the election year. S corporations cannot make this election for credits taken at the entity level.

Official sources

• https://www.ftb.ca.gov/forms/2024/2024-3547.pdf