3834: Interest Computation Under the Look-Back Method for Completed Long-Term Contracts (2025)
California · FTB · Used for tax years 2025
California Form 3834 calculates interest owed or to be refunded under the look-back method for completed long-term contracts. It reports adjustments to prior-year income and tax based on actual contract prices and costs compared with previously estimated amounts, using the regula
What you'll need
Have these records and details available to complete the applicable parts of Form 3834:
- Your name as shown on your California tax return, address, and applicable identification numbers.
- Prior-year tax returns or adjusted figures showing income and tax amounts.
- Actual and estimated contract prices and costs for the contracts included in the calculation.
- Applicable prior-year tax rates.
- Earlier Forms 3834, if you were required to file for an earlier contract completion year affecting the same prior years. Part I, line 1 requires copies of those prior-year forms to be attached.
- The name and identification number of any pass-through entity in which you owned an interest that holds contracts covered by this calculation. Attach a schedule if there is more than one entity.
How to file
The form refers to filing it with your tax return or separately. Sign Form 3834 only if you file it separately, not with your tax return. If filing separately and jointly, both spouses or registered domestic partners must sign.
The supplied form does not give a mailing address or e-filing directions.
Common mistakes
- Do not overlook extra years. If more than three prior years are involved, check the box and attach additional Forms 3834 as needed.
- Do not leave out the entity schedule when more than one pass-through entity is involved.
- In Part I, line 4, use the tax rates in effect for the prior years, not a single rate for every year.
- In Part II, pass-through entities other than S corporations must skip line 6 and carry line 5 to line 7. S corporations are directed to consult General Information H.
- Sign the form only when filing it separately. For a separate joint filing, both spouses or registered domestic partners must sign. The form warns that forging a spouse’s or registered domestic partner’s signature is unlawful.
Questions people ask
What is Form 3834 used to calculate?
It calculates interest under the look-back method for completed long-term contracts. The calculation compares income based on actual contract prices and costs with income reported using estimated prices and costs.
What calculation methods appear on the form?
Part I is the Regular Method. Part II is the Simplified Marginal Impact Method.
Can the calculation result in a refund of interest?
Yes. If total interest to be refunded exceeds total interest due, enter the difference on Part I, line 9, or Part II, line 10. If interest due is larger, enter the difference as interest owed on Part I, line 10, or Part II, line 11.
What if an earlier Form 3834 already adjusted the same prior years?
For Part I, line 1, use the adjusted income from line 3 of the most recent contract completion year’s Form 3834 affecting those prior years, and attach copies of the prior-year forms. For Part I, line 5, use the amount required to be reported on line 4 of that most recent applicable Form 3834.