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Instructions for Form FTB 3803

Parents’ Election to Report Child’s Interest and Dividends

General Information

Specific Line Instructions

A Purpose

Name and Social Security Number. Enter your name as

shown on your return. If filing a joint return, include your

Use form FTB 3803 if you are a parent and elect to report the

spouse’s name but enter the social security number of the per-

income of your child on your California income tax return. If you

son whose name is shown first on the return.

do, the child will not have to file a return. You may report your

For additional information regarding interest, dividends, and cap-

child’s income on your California income tax return even if you

ital gain distributions taxable by California, refer to the instruc-

do not do so on your federal income tax return. You may file

tions for Schedule CA (540) or Schedule CA (540NR).

this form if your child meets all of the following conditions:

•

Was under age 14 on January 1, 1999;

Line 1a – Enter all interest income taxable by California and received by

•

Had income only from interest and dividends;

your child in 1998. If, as a nominee, your child received interest

•

Had gross income for 1998 that was more than $700 but

that actually belongs to another person, write the amount and

less than $7,000;

‘‘ND’’ (for ‘‘nominee distribution’’) on the dotted line to the left of

•

Made no estimated tax payments for 1998;

line 1a. Do not include amounts received by your child as a

•

Did not have any overpayment of tax shown on his or her

nominee in the total entered on line 1a.

1997 return applied to the 1998 return; and

•

If your child received Form 1099-INT showing California tax-

Had no state income tax withheld from his or her income

exempt interest or Form 1099-OID, see the instructions for

(backup withholding).

federal Form 8814.

As a parent, you must also qualify as explained below in

Line 1b – If your child received any interest income exempt from California

General Information B.

tax, such as interest on United States savings bonds or Califor-

Use Part I to figure the amount of the child’s income to report

nia municipal bonds, enter the total tax-exempt interest on

on your return. Use Part II to figure any additional tax that must

line 1b. Also include any exempt-interest dividends your child

be added to your tax.

received as a shareholder in a mutual fund or other regulated

investment company. Do not include this interest on line 1a.

B Parents Who Qualify to Make the Election

Refer to the instructions for Schedule CA (540), California

Adjustments — Residents, or Schedule CA (540NR), California

You qualify to make this election if you file Form 540, California

Resident Income Tax Return, or Form 540NR, California Non-

Adjustments — Nonresidents or Part-Year Residents, line 8, for

information on tax-exempt interest for California purposes.

resident or Part-Year Resident Income Tax Return, and if any of

the following applies to you:

Line 2 – Enter ordinary dividends received by your child in 1998. Ordi-

•

You and the child’s other parent were married to each other

nary dividends should be shown on federal Form 1099-DIV,

and you file a joint return for 1998.

box 1. Also, include ordinary dividends your child received

•

You and the child’s other parent were married to each other

through a partnership, an S corporation, an estate or trust.

but you file separate returns for 1998 AND you had the

If your child received, as a nominee, dividends that actually

higher taxable income. If you do not know if you had the

belong to another person, enter the amount and ‘‘ND’’ on the

higher taxable income, get federal Pub. 929, Tax Rules for

dotted line next to line 2. Do not include amounts received as a

Children and Dependents.

nominee in the total for line 2.

•

You were unmarried, treated as unmarried for state income

Line 3 – Enter the capital gain distributions taxable by California and

tax purposes or separated from the child’s other parent by a

received by your child in 1998. Capital gain distributions should

divorce or separate maintenance decree. You must have

be shown on federal Form 1099-DIV, box 2a. If your child

had custody of your child for most of the year (you were the

received, as a nominee, capital gain distributions that actually

custodial parent). If you were the custodial parent and you

belong to another person, enter the amount and ‘‘ND’’ on the

remarried, you may make the election on a joint return with

dotted line next to line 3. Do not include amounts received as a

your new spouse. But if you and your new spouse (your

nominee in the total for line 3.

child’s stepparent) do not file a joint return, you qualify to

If your child received capital gain distributions (shown on federal

make the election only if you had higher taxable income

Form 1099-DIV, box 2a) and you have other gains or losses to

than your new spouse.

report on your Schedule D, California Capital Gain or Loss

Note: If you and the child’s other parent were not married but

Adjustment, you must report part or all of your child’s capital

you lived together during the year with the child, you qualify to

gain distributions on your Schedule D instead of on form

make the election only if you are the parent with the higher tax-

FTB 3803, line 6. Refer to federal Pub. 929 for details on how

able income.

to figure the amount to report on your Schedule D.

If you elect to report your child’s income on your return, you

may not reduce that income by any deductions that your child

Line 6 – If the total amount on line 6 of all form(s) FTB 3803 is less than

would be entitled to on his or her own return, such as the pen-

the total amount on line 6 of all your federal Forms 8814, enter

alty on early withdrawal of child’s savings or any itemized

the difference on Schedule CA (540 or 540NR), line 21f, col-

deductions. For more information, see the instructions for fed-

umn B. Also write ‘‘FTB 3803’’ on Schedule CA (540 or 540NR),

eral Form 8814, Parents’ Election to Report Child’s Interest and

line 21f.

Dividends.

If the total amount on line 6 of all form(s) FTB 3803 is more

than the total amount on line 6 of all your federal Forms 8814,

C How to Make the Election

enter the difference on Schedule CA (540 or 540NR), line 21f,

column C. Also write ‘‘FTB 3803’’ on Schedule CA (540 or

To make the election, complete and attach form FTB 3803 to

540NR), line 21f.

your Form 540 or Form 540NR and file your return by the due

date (including extensions).

If you did not file federal Form 8814, enter the amount from

form FTB 3803, line 6, on Schedule CA (540 or 540NR),

You must file a separate form FTB 3803 for each child whose

line 21f, column C. Also write ‘‘FTB 3803’’ on Schedule CA (540

income you choose to report.

or 540NR), line 21f.

Line 9 – Add the amount of tax from each form FTB 3803, line 9 to any

tax you enter on Form 540, line 20 or Form 540NR, line 22.

Also check the box labeled ‘‘FTB 3803’’ on Form 540, line 20 or

Form 540NR, line 22.

Side 2

FTB 3803 1998

Instructions For Form Ftb 3803 - Parents' Election To Report Child'S Interest And Dividends - 1998

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