Schedule P (540): Alternative Minimum Tax and Credit Limitations - Residents (2024)
California · FTB · Used for tax years 2024
California Schedule P (540) is attached to Form 540 to calculate alternative minimum taxable income, alternative minimum tax, and credit limitations for residents. It records tax adjustments and preferences, credits used this year, and credit carryovers.
What you'll need
Have these forms available, as applicable to your entries:
- Form 540: Schedule P uses your standard deduction, taxable income, and tax amounts from this return. Use the same name and Social Security number or ITIN.
- Federal Schedule A (Form 1040) and federal Form 1040 or 1040-SR: These provide amounts for the medical and dental expense calculation if you itemized deductions.
- Schedule CA (540): Part I, line 16 of Schedule P uses net operating loss deductions from this schedule.
- Schedule K-1 (541): Beneficiaries of estates and trusts enter the amount from line 12a on Schedule P, line 12.
- Applicable credit forms: Attach your credit forms to Form 540. The schedule specifically lists FTB 3507 for the prison inmate labor credit and FTB 3506 for the child and dependent care expenses credit.
How to file
Attach Schedule P (540) to Form 540. Also attach your credit forms to Form 540.
The supplied form does not give a mailing address or e-file directions.
Common mistakes
- Including a state income tax refund on line 6: The form explicitly says not to include it. That line is for refunds of personal property taxes and real property taxes.
- Forgetting credit forms: Part III reminds you to attach your credit forms to Form 540.
- Overlooking California/federal differences: The form directs you to the instructions for these differences.
- Exceeding the business credit limitation: If you are subject to this limitation, total business credits used in Part III, Sections A and B, column (b), cannot exceed $5,000,000.
- Missing the solar credit exception: If you have a solar energy or commercial solar energy credit carryover, Part II, line 26 directs you to Part III, Section C before reporting the adjusted AMT on Form 540, line 61.
Questions people ask
What does Schedule P (540) calculate?
It calculates alternative minimum taxable income in Part I and alternative minimum tax in Part II. Part III covers credits that reduce tax.
Where do I start if I did not itemize deductions?
Enter your standard deduction from Form 540, line 18, on Schedule P, line 1. Then go to line 6. If you itemized deductions, start with line 2 instead.
What rate is used to calculate tentative minimum tax for 2024?
Part II, line 24 tells you to multiply line 23 by 7.0% (.07).
What if my alternative minimum tax calculation is zero or less?
Part II, line 26 tells you to subtract regular tax on line 25 from tentative minimum tax on line 24. If the result is zero or less, enter zero on line 26 and on Form 540, line 61.