California offers several credits that may reduce your tax liability or increase your refund. Some credits are calculated automatically based on information entered elsewhere on the return, while others require additional information to be entered in the California Credits section.
Program Entry
California Return → Credits
Child Care Credit
California allows eligible taxpayers to claim a credit based on qualifying child and dependent care expenses.
The credit is based on information entered for the federal Child and Dependent Care Credit and California income limitations.
You may qualify if you paid expenses for the care of a qualifying:
- Child
- Spouse
- Dependent
so that you could work or look for work.
College Access Tax Credit
The California College Access Tax Credit is available to taxpayers who received an approved tax credit certificate from the California Educational Facilities Authority.
Only taxpayers who have received an approved certificate should enter this credit.
Renters Credit
California provides a Nonrefundable Renters Credit for eligible taxpayers who paid rent in California for at least six months during the tax year on a qualifying residence.
Eligibility depends on:
- Filing status
- Income limitations
- Residency requirements
This credit can reduce California tax liability but cannot create a refund by itself.
Schedule S, Other State Tax Credit
California residents who pay income tax to another state on income that is also taxed by California may qualify for the Other State Tax Credit.
This credit helps prevent double taxation of the same income.
Examples include:
- Wages earned in another state
- Partnership income taxed by another state
- S Corporation income taxed by another state
- Business income taxed by another state
CA Earned Income Credit & Foster Youth Tax Credit (Form 3514)
California Earned Income Tax Credit (CalEITC)
The California Earned Income Tax Credit is a refundable credit available to eligible low-income working taxpayers.
Eligibility is based on:
- Earned income
- Filing status
- California residency
- Other California requirements
Foster Youth Tax Credit (FYTC)
The Foster Youth Tax Credit is available to eligible current and former foster youth who meet California's requirements.
Young Child Tax Credit (YCTC)
Eligible taxpayers who qualify for CalEITC and have a qualifying young child may also qualify for the Young Child Tax Credit.
Other Credits
The Other Credits section contains specialized California credits that may apply to qualifying employment activities, business investments, housing projects, energy conservation efforts, environmental programs, and other approved California programs.
Select Begin to enter any credits that apply to your situation.
Business and Economic Development Credits
These credits are generally related to business growth, hiring initiatives, economic investment, and research activities.
Available credits include:
- California Competes Tax Credit
- Community Development Credit
- Main Street Small Business Tax Credit
- Main Street Small Business Tax Credit II
- New Employment Credit
- New Jobs Credit
- Research Credit
- Enterprise Zone Hiring Credit
- Enterprise Zone Sales/Use Tax Credit
- LAMBRA Hiring Credit
- MEA Hiring Credit
- TTA Hiring Credit
Motion Picture and Television Credits
These credits are available to taxpayers who receive an allocation through California's film and television production programs.
Available credits include:
- CA Motion Picture/Television Production Credit
- New California Motion Picture/Television Production Credit
- Program 3.0 California Motion Picture/Television Production Credit
Agricultural and Environmental Credits
These credits may apply to qualifying agricultural activities, conservation efforts, environmental projects, and resource preservation initiatives.
Available credits include:
- Agricultural Products Credit
- Donated Agricultural Products Transportation Credit
- Donated Fresh Fruits & Vegetables Credit
- New Donated Fresh Fruits or Vegetables Credit
- Enhanced Oil Recovery Credit
- Environmental Tax Credit
- Energy Conservation Credit
- Water Conservation Credit
- Recycling Equipment Credit
- Natural Heritage Preservation Credit
- Salmon & Steelhead Trout Habitat Credit
Solar and Energy Credits
These credits may be available for qualifying renewable energy and conservation projects.
Available credits include:
- Solar Energy Credit
- Solar Pump Credit
- Commercial Solar Energy Credit
- Commercial Solar Electric System Credit
- Low-Emission Vehicles Credit
Employer and Employment Credits
These credits are associated with employer-sponsored programs, employee benefits, transportation programs, and qualifying labor initiatives.
Available credits include:
- Employer Child Care Contribution Credit
- Employer Child Care Program Credit
- Employee Ridesharing Credit
- Large Employer Ridesharing Credit
- Small Employer Ridesharing Credit
- Transit Passes Credit
- Ridesharing Credit
- Prison Inmate Labor Credit
Family and Housing Credits
These credits may be available for qualifying family-related expenses, housing programs, and dependent support situations.
Available credits include:
- Child Adoption Costs Credit
- Dependent Parent Credit
- Joint Custody Head of Household Credit
- Senior Head of Household Credit
- Young Infant Credit
- Farmworker Housing Construction Credit
- Low-Income Housing Credit
- Residential Rental & Farm Sales Credit
Pass-Through Entity Credits
These credits are generally reported from partnerships, S corporations, estates, and trusts.
Available credits include:
- PTE Elective Tax Credit
- PTE ELECT Credit
Other Specialized Credits
Additional California credits may be available for specific qualifying activities and industries.
Available credits include:
- Political Contributions Credit
- Contribution of Computer Software Credit
- Disabled Access for Eligible Small Business Credit
- Orphan Drug Credit
- Prior Year Alternative Minimum Tax Credit
Important
Many of these credits require:
- Credit certificates
- California schedules
- Carryover worksheets
- Pass-through entity documentation
- Prior-year California tax records
Only enter credits for which you have supporting documentation.
How Does This Affect My Return?
Credits entered in this section may:
- Reduce California tax liability.
- Increase a California refund.
- Offset taxes paid to another state.
- Apply business and investment credits.
- Claim employment, housing, environmental, and energy-related incentives.
- Report credits passed through from partnerships, S corporations, trusts, or estates.
Notes
- Some California credits are calculated automatically when information is entered elsewhere in the return.
- Form 3514 is used to calculate the California Earned Income Tax Credit, Foster Youth Tax Credit, and Young Child Tax Credit.
- Schedule S is used to calculate the Other State Tax Credit.
- Many California credits require supporting certificates, schedules, or prior-year carryover information.
- Keep all documentation supporting credits claimed on the return.