Schedule P (540): Alternative Minimum Tax and Credit Limitations - Residents (2025)
California · FTB · Used for tax years 2025
California Schedule P (540) is attached to Form 540 to calculate residents’ alternative minimum taxable income and alternative minimum tax. It also figures limitations on tax credits and records credits used this year and credit carryovers.
What you'll need
Have these forms available, as applicable to your entries:
- California Form 540: Schedule P uses your name, SSN or ITIN, and amounts from this return.
- Federal Schedule A (Form 1040) and Form 1040 or 1040-SR: Used for the medical and dental expense calculation if you itemized deductions.
- Schedule CA (540): Used for net operating loss deduction amounts on Part I, line 16.
- Schedule K-1 (541): Beneficiaries of estates and trusts use line 12a for Part I, line 12.
- Credit forms for credits you claim: The form specifically lists FTB 3507 for the prison inmate labor credit and FTB 3506 for the child and dependent care expenses credit. Attach your credit forms to Form 540.
How to file
Attach your completed 2025 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-filing directions.
Common mistakes
- Including a state income tax refund on Part I, line 6. The form says not to include it there.
- Leaving out credit forms. Part III reminds you to attach them to Form 540.
- Overlooking California/federal differences. Part I specifically directs you to the instructions for these differences.
- Exceeding the business credit limit when it applies. If you are subject to the business credit limitation, total business credits used in Part III, Sections A and B, column (b), cannot exceed $5,000,000.
- Missing the solar credit carryover exception. If you have a solar energy or commercial solar energy credit carryover, follow the exception on Part II, line 26, and the Section C calculation before reporting adjusted AMT on Form 540, line 61.
Questions people ask
What if I did not itemize deductions?
Enter your standard deduction from Form 540, line 18, on Schedule P, Part I, line 1. Then go to line 6.
How is tentative minimum tax calculated?
Part II, line 24, tells you to multiply line 23 by 7.0% (.07).
What if my alternative minimum tax calculation is zero or negative?
On Part II, line 26, subtract line 25 from line 24. If the result is zero or less, enter zero on line 26 and on Form 540, line 61.
Can any credits reduce alternative minimum tax?
Part III, Section C, lists solar energy and commercial solar energy credit carryovers as credits that may reduce alternative minimum tax. Section C, line 25, directs you to enter the adjusted AMT on Form 540, line 61.