3835: State Historic Rehabilitation Tax Credit (2024)
California · FTB · Used for tax years 2024
California Form FTB 3835 reports the State Historic Rehabilitation Tax Credit for the current year, credit carryovers to future years, and any credit recapture. It also reports credits received from or passed through to owners or beneficiaries of certain entities and is attached
Who files this form
Use Form FTB 3835 to report your current-year State Historic Rehabilitation Tax Credit, credit carried over to future years, and any credit recapture. Also use it to claim credits passed through from an S corporation, estate, trust, partnership, or LLC.
S corporations, estates, trusts, partnerships, and LLCs classified as partnerships should complete the form to report credits passed through to shareholders, beneficiaries, partners, or members.
You must have a tax credit allocation confirmation number from the California Tax Credit Allocation Committee (CTCAC) before claiming the credit.
What you'll need
Have these records and forms available, as applicable:
- Your California tax return, with your name and taxpayer identification number.
- The name and taxpayer identification number of the taxpayer who generated the credit, even if that is you.
- Your CTCAC tax credit allocation confirmation number and allocated credit amount.
- Schedule K-1 (100S, 541, 565, or 568) and its attached credit statement if you received a pass-through credit. Attach a statement to FTB 3835 listing the names and identification numbers of the entities that passed through or allocated credits to you.
- Records documenting the credit and any carryovers. Keep these records because the Franchise Tax Board may require access to them.
- Form FTB 3544 if your corporation assigns credit within its combined reporting group.
- Form FTB 3870 if you elect to make credits disallowed by the $5,000,000 business credit limitation refundable in future years.
How to file
Attach Form FTB 3835 to your California income tax return. Enter the credit claimed on line 5a and on your current-year return using credit code 243.
File a separate FTB 3835 for each tax credit allocation confirmation number. If you file more than one, add the credits claimed on all forms and report the total on your return.
Entities passing through credits should attach FTB 3835 to Form 100S, 541, 565, or 568, as applicable. Report each recipient’s pass-through credit and allocation confirmation number on Schedule K-1.
If you make the refundable-credit election, attach the completed Form FTB 3870 to your original, timely filed return.
Common mistakes
- Writing “same” for the taxpayer generating the credit. Enter the taxpayer’s name and identification number even if they match the information on your return.
- Claiming the credit without an allocation confirmation number. You cannot claim it without that number. Use a separate FTB 3835 for each number.
- Including assigned credits on line 5a. Do not include assigned credits claimed on FTB 3544, Part B.
- Deducting an expense for which a credit is allowed. The text says an expense deduction is not allowed when a credit for that expense is allowed.
- Carrying the credit back to an earlier year. Carryback is not allowed. Apply carryovers to the earliest taxable year.
- Counting amounts elected as refundable in line 6 carryovers. Do not include those amounts on line 6. Credits limited by your tax liability cannot be included in the refundable-credit election, but may be carried over.
Questions people ask
When do I first claim the credit?
Claim it in the first taxable year in which the structure is placed into service. Apply for an allocation through the Office of Historic Preservation and receive a CTCAC allocation confirmation number before claiming it.
Can I carry unused credit forward?
Yes. If available credit exceeds your current-year tax liability, the unused credit may be carried over for eight years or until exhausted, whichever comes first. For credits disallowed by the business credit limitation and not elected as refundable, the carryover period is extended by the number of taxable years the credit was not allowed.
Is the credit refundable?
The credit is generally not refundable. However, you may make an irrevocable election on FTB 3870 for credits disallowed by the $5,000,000 business credit limitation. 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.
What counts as a qualified residence?
It must be a principal residence owned and occupied by an individual taxpayer with modified adjusted gross income of $200,000 or less. It must be the taxpayer’s principal residence, or become their principal residence within two years after rehabilitation. Credit can be recaptured if the taxpayer does not use it as their principal residence within that period.