3596: Paid Preparer’s California Earned Income Tax Credit Checklist (2024)
California · FTB · Used for tax years 2024
California Form FTB 3596 is a paid preparer’s due diligence checklist for the California Earned Income Tax Credit. It records the preparer’s review of credit eligibility, completion of required worksheets, record retention, and certification that the answers are true, correct, an
Who files this form
Form FTB 3596 is the paid preparer’s due diligence checklist for the California Earned Income Tax Credit (EITC).
The preparer completes the checklist and attaches it to the taxpayer’s original or amended California Form 540, 540 2EZ, or 540NR.
What you'll need
Have the taxpayer’s name and SSN or ITIN, along with the preparer’s name, PTIN, and license, registration, or enrollment details.
The checklist calls for Form FTB 3514 and the California EITC worksheet from its instructions, or your own worksheet containing the same information.
Keep these five types of records:
- A copy of Form FTB 3596.
- The EITC worksheet or equivalent worksheet.
- Copies of taxpayer documents relied on to determine eligibility and calculate the credit.
- A record of how, when, and from whom the information used to prepare the form and worksheets was obtained.
- A record of additional information relied on, including questions asked and the taxpayer’s answers.
List on the checklist any taxpayer documents you relied on. The form requires keeping the records for 4 years from the latest of the dates specified under Document Retention in the instructions. Those instructions were not provided here.
How to file
Complete Form FTB 3596 truthfully and accurately, carry out the actions described in the checklist, and answer the certification question in Part III.
Attach the form to the taxpayer’s original or amended California Form 540, 540 2EZ, or 540NR.
Common mistakes
- Not following up on questionable information. If information appears incorrect, incomplete, or inconsistent, make reasonable inquiries and document them at the time. Include whom you asked, when, the answers, and how the information affected Form FTB 3514.
- Assuming financial support answers the residency question. Ask whether the child lived with the taxpayer for over half the year, even if the taxpayer supported the child for the entire year.
- Not keeping the required records. Part III requires all five listed record types to be retained for the required period.
- Treating the checklist alone as enough. The form requires both accurate completion and the actions described in the checklist. It warns that failure to comply with all EITC due diligence requirements may result in a $500 penalty for each failure.
Questions people ask
Can a preparer use their own EITC worksheet?
Yes. It must provide the same information as the California EITC worksheet in the Form FTB 3514 instructions.
What does the knowledge requirement involve?
Interview the taxpayer, ask questions, and document the responses at the time. Also review information to determine whether the taxpayer qualifies for the credit and for what amount.
What if the taxpayer has no qualifying child?
Question 9a asks whether the taxpayer is eligible for the EITC without a qualifying child. If the taxpayer is claiming the credit and has no qualifying child, skip questions 9b and 9c and go to Part III.
Does the checklist address self-employment income?
Yes. Question 8 asks whether the preparer asked questions to prepare a complete and correct federal Form 1040, Form 1040-SR, Schedule C, Schedule F, or Schedule SE when the taxpayer reports self-employment income.
Should the preparer ask about documents for a possible audit?
Yes. Question 7 asks whether the preparer asked the taxpayer if they could provide documentation supporting eligibility for and the amount of the EITC claimed if the return is selected for audit.