How do I prepare California Form 3804 and 3893 with a 1065 return using interview forms in CCH® ProSystem fx® Tax?

  • Article Type:
  • How To
  • Last Modified:
  • 08/04/2022

Objectives

Learn how to prepare and populate California Form 3804 and / or Form 3893 in a partnership return using interview forms.

Environment

  • CCH ProSystem fx Tax
  • Partnership - 1065
  • Interview - IVF
  • California - CA
  • Electronic filing
  • Form 3804
  • Form 3893

Procedure

Prepare the 3804

  1. Go to Interview Form California > CA20.
  2. In Box 44 - Produce Form 3804, select the checkbox. 
  3. Calculate the return.

(Optional) Override Income and Withholding Amount of Partners on 3804

  1. Go to Interview Form California > CA22.
  2. In Box 30 - Partner number, input applicable partner number.
  3. In Box 32 - Form 592-B/592-F/3804 Amount subject to withholding - override, input an applicable amount for 3804, line a.
  4. In Box 33 - Form 592-B/592-F/3804 Total CA tax withheld - override, input applicable amount for 3804, line b.
  5. Calculate the return.

Prepare the 3893

Tax Year 2021 FTB Form 3893 automatically activates when 3804 is present

  • Amount of Payment is derived from Form 3804, line 3.
  • Overrides are the optional input override step 6 (above) or to use government form (pink) override of Form 3804, line 3.
  • Printing the 2021 FTB Form 3893 is automatic in Accountant, Government, and Client copies, if Form 3804 is prepared.

Tax Year 2022 FTB Form 3893 automatically activates when 3893 (2021) is present

  • 3893 (2022) prepayment is simply half of the calculated 2021 amount.
  • The due date of this voucher is June 15th, 2022.
  • Printing the FTB Form 3893 (2022) is automatic with the Accountant, Government, and Client copies along side TY 2021 FTB Form 3893. 
  • FTB Form 3893 (2022) can be prepared without preparing FTB Form 3804:
    1. Go to CA14 - Ext. Payments, Int., Penalties, Form 3533-Bm Amended Return & Sch EO.
    2. In Box 38 - Form 3893 Payment 1 amount due - override, input applicable amount.
    3. Calculate the return.
      • Note: This method does not prepare a 3893 (2022) letter with release 2021.03040. To prepare the letter, generate the 3804, edit the 3893 (2022) letter in MS Word, then turn off the 3804.

California Schedule K-1 Received from a Lower-tier partnership with line 15f - 3804-CR credit amount

If CA is the home state of this return:
  1. Go to IRS K1P.
  2. In Box 91 - State, input CA.
  3. In Box 194 - Backup withholding, input 3804-CR credit amount received.
  4. Calculate the return.
If CA is not the home state of the return:
  1. Go to IRS K1P.
  2. In Box 458- 460 , input CA.
  3. In Boxes 632-634 - State income tax withheld, in the input 3804-CR credit amount received.
  4. Calculate the return.

Form 565

Form 565, page 2, line 25 - Amount due with 3804, if different than system calculation

  • Amount present on 3804, line 3 carries automatically to page 2, line 25.
  • Override available: California > CA14, box  31 - Pass-through entity elective tax.

Form 565, page 2, line 30 - Amount paid with 3893, if different than system calculation

  • Amount present on 3893 carries automatically to page 2, line 30
  • Override available: California > CA14, box  39 - Amount paid with Form 3893 - override.

Form 565, page 4 - Schedule K, line 15f, if different than system calculation

  • Go to California > CA2 (scroll to page 2), boxes 192 and 193, input with expected amount(s), which can be specially allocated using codes 55842, and 55841.
  • Go to Federal Interview Form 10 and Form 12 to add a CA return footnote and K-1 Footnote to describe the amount(s).

Form 568

Form 568, page 1, line 4 - Amount due with 3804, if different than system calculation

  • Amount present on 3804, line 3 carries automatically to Form 568 page 1, line 4.
  • Override available: California > CA14, box  31 - Pass-through entity elective tax.

Form 568, page 1, line 9 - Amount paid with 3893, if different than system calculation

  • Amount present on 3893 carries automatically to page 1, line 9
  • Override available: California > CA14, box  39 - Amount paid with Form 3893 - override.

Form 568, page 5 - Schedule K, line 15f, if different than system calculation

  • Go to California > CA4 (scroll to page 2), boxes 192 and 193, input with expected amount(s), which can be specially allocated using codes 55842, and 55841.
  • Go to Federal Interview Form 10 and Form 12 to add a CA return footnote and K-1 Footnote to describe the amount(s).

Electronic Filing

  • If Form 3804 is prepared, then it will be included with the electronic file.
  • If Form 3893 (2022) is prepared with release 2021.03050 / 2021-3.5 and higher, then it can be electronically filed separate from the 565/568 return, and amounts due with the voucher can be withdrawn through the direct debit feature.

Notes

  • The Forms 3804 and 3893 appear in the list of California Withholding Government Forms, along with the 592s, 588 and 593.
  • Include / Exclude specific partner(s) in the 3804:
    • Go to CA22 > Box 145 - Include on Form 3804 - override, select Yes or No, as applicable to your return.
  • 3893 Filing Instructions and Transmittal letters are now prepared with release 2021.03031.
  • Only partner types Individual, Estate, Trust, and Grantor Trust are included on the Form 3804.
    • Partners with input as a Disregarded Entity will be excluded from Form 3804.
      • The CA FTB revised the form instructions in March 2022 to allow DRE to claim the PTE tax credit. This is a work in progress.
    • FTB 3804 Instructions document Qualified Taxpayer:
      • "Qualified taxpayer – is defined as an individual, fiduciary, estate, or trust that is a partner, shareholder, or member of an electing qualified PTE that consents to have their pro-rata share or distributive share of income included in the qualified net income subject to the elective tax of the electing qualified PTE. The qualified taxpayer may be a resident, nonresident, or part-year resident. The qualified taxpayer does not include disregarded entities and their partners or members."
  • FTB Instructions for passthroughs will refer to FTB 3804-CR, but this form is only relevant at the individual tax return
    • The 3804-CR is used by a member on their individual return to list the partnership and S Corporation K-1s received reporting the amount of tax paid on their behalf by the Pass-through entity and calculate an amount allowed as a credit on their personal return or carried over into a following year.
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