3554: New Employment Credit (2024)
California · FTB · Used for tax years 2024
California Form 3554 calculates the 2024 New Employment Credit and is attached to your California tax return. It reports the net increase in full-time employees, available and claimed credits, carryovers, and any credit recapture.
Who files this form
Form FTB 3554 is used to report the New Employment Credit on a California tax return for tax year 2024. It includes entries for credit generated, pass-through credits, prior-year carryovers, credit claimed, and credit recapture.
To calculate credit generated, the form requires a tentative credit reservation for all claimed employees. It also directs you to stop if the net increase in full-time employees on line 17 is zero or less.
What you'll need
Have the following information available to complete the form:
- Names and identifying numbers for the taxpayer on the return and the taxpayer generating the credit.
- Tentative credit reservation information for all claimed employees.
- The business's Principal Business Activity (PBA) code and information to answer the industry question in item B.
- Employee counts, hours, and weeks worked in California for the base year and tax year 2024.
- The total number of qualified full-time employees and the tentative credit amount.
- Schedule K-1 (100S, 541, 565, or 568), if reporting pass-through New Employment Credits.
- Prior-year credit carryover information, if applicable.
- Form FTB 3544, Part A, column (g), if reporting assigned credit.
How to file
Attach Form FTB 3554 to your California tax return. Enter your name as shown on that return and the identifying information requested at the top of the form.
Common mistakes
- Do not continue if you answer “No” to receiving a tentative credit reservation for all claimed employees. Item A says to stop.
- Do not continue if line 17 is zero or less. The form says you do not qualify.
- Do not count more than 2,000 hours per employee on lines 3 and 11.
- Do not enter an applicable percentage greater than 1.0000 on line 19.
- Do not include assigned credit claimed on Form FTB 3544, Part B, in line 25a.
- Enter 0 on line 25b if you are not a corporation.
Questions people ask
Which years does Part I compare?
Part I compares annual full-time equivalents working in California during the base year with those for tax year 2024. Section A is for the base year, and Section B is for 2024.
Where do I enter a pass-through New Employment Credit?
Enter credits from Schedule K-1 (100S, 541, 565, or 568) on line 22.
Where do I enter a prior-year credit carryover?
Enter it on line 23. Line 24 adds the credit generated on line 21, pass-through credits on line 22, and the carryover on line 23.
How is the carryover available for future years calculated?
Add lines 25a, 25b, and 25c, then subtract that total from line 24. Enter the result on line 26.