What California Form 540NR (2013) Is For
California Form 540NR (2013) is the California nonresident or part-year resident income tax return for reporting California source income. The return applies California Revenue & Tax Code sourcing and proration rules to determine 2013 taxable income.
The California Franchise Tax Board calculates income tax on California wages, rent income, and California real property income under California’s jurisdiction to tax income. The long form supports itemized deductions, tax credits, and Schedule CA for California adjustments across income categories.
A nonresident taxpayer reports total income, then assigns California-source income using Column E and related allocation rules. Business filers may apply market-based sourcing, California apportionment rules, and the single-sales-factor apportionment formula on Form 565.
When You Would Use California Form 540NR (2013)
Taxpayers file California Form 540NR for the 2013 tax year when their residency status changes under California law. Part-year residents must report worldwide income earned while they were California residents, together with income from California sources received during periods of nonresidency.
A nonresident taxpayer files this return when gross income or adjusted gross income exceeds the applicable California filing thresholds, or when the California franchise tax applies. This form is also appropriate for taxpayers who need to file a late return, submit an amended return, or correct previously reported Schedule CA amounts on required California tax forms.
An amended return requires the filer to check the “Amended” box, clearly explain the reason for the changes, and revise all figures that depend on federal adjusted gross income. A taxpayer may also use Form 540NR to report adjustments made by the Internal Revenue Service, including revisions related to cancellation of debt income.
Key Rules or Details for 2013
California franchise tax rules limit tax to California-source income for a California nonresident under the California Revenue & Tax Code. The return computes a California Source Income Tax Rate using graduated tax rates applied to total taxable income.
The filer prorates that income tax based on California-source income, which limits the tax to California amounts. Schedule CA separates federal adjusted gross income from California adjustments and Column E, California-source amounts, to calculate accurate California resident amounts.
Line 7 wages include California wages for services performed in California, supported by the Form W-2. S corporation and partnership items flow through Schedule K-1, California Schedule K-1, or California Schedule S.
Step-by-Step (High Level)
Step 1: A filer begins by confirming California residency status and determines whether Form 540NR applies instead of Form 540 based on residency rules.
Step 2: All relevant income documents are gathered, including Form W-2, Schedule K-1, Form 593, and other records that report income from every source.
Step 3: Schedule CA is completed by applying California adjustments and following Column E instructions to identify California source income and California amounts.
Step 4: Total taxable income is calculated, the tax on total taxable income is identified, and the figures are divided to determine the effective California income tax rate.
Step 5: The effective rate is applied to California source income, itemized deductions are prorated as required, and eligible tax credits are claimed under California Revenue and Taxation Code Section 17041(b).
Common Mistakes and How to Avoid Them
Taxpayers experience processing delays when recurring filing mistakes create incomplete sourcing, incomplete documentation, or inconsistent entries. Clear identification and correction of these mistakes support accurate compliance review and timely processing.
- Missing Schedule CA (540NR): This mistake occurs when a taxpayer files Form 540NR without attaching Schedule CA (540NR). The taxpayer must attach Schedule CA (540NR) and complete all applicable lines before submission.
- Incorrect Column E sourcing: This mistake occurs when a taxpayer reports non-California amounts in Column E as California-source income. The taxpayer must enter only California-source income, plus resident-period income for part-year residency.
- Federal withholding reported as California withholding: This mistake occurs when a taxpayer transfers federal withholding amounts instead of California withholding. The taxpayer must report only California income tax withheld, as shown on state withholding lines.
- Withholding claimed without supporting statements: This mistake occurs when a taxpayer claims withholding without attached W-2 or 1099 forms showing California withholding. The taxpayer must attach wage and withholding statements that support every payment amount claimed.
- Proration omitted for deductions or credits: This mistake occurs when a taxpayer claims full itemized deductions or tax credits without applying the required proration. The taxpayer must prorate deductions and credits using the ratios required in 540NR instructions.
What Happens After You File
The California Franchise Tax Board processes paper California tax returns more slowly than electronically filed California returns. A filer monitors return status online and responds to requests for proof of payments and withholding.
The agency verifies amounts against employer reports, estimated payments, and Form 593 withholding records. If a California return shows a balance due, penalties and interest accrue from the original due date.
An FTB notice may propose changes to California source income, itemized deductions, or tax credits calculations. Some disputes move to the Revenue Agent Report Unit, and the filing process follows State Form Instructions.
FAQs
Who must file California Form 540NR (2013)?
A California nonresident or part-year resident files when California-source income creates a California filing requirement. Residency classifications control reporting.
Does Form 540 apply to nonresidents?
Form 540 is the California resident income tax return for full-year California resident filers. Nonresidents generally file Form 540NR.
What does Schedule CA (540NR) do?
The Schedule CA provides information about California adjustments and the California-source amounts listed in Column E. Schedule CA also supports proration calculations.
Can a filer claim the California Earned Income Tax Credit?
Eligibility depends on 2013 rules, filing status, income limits, and qualifying earned income. The filer should review the 2013 instructions.
Do nonresidents pay California tax on pensions?
California generally does not tax retirement income received by nonresidents after leaving California. The filer should confirm sourcing under the California Administrative Code.
