Form FTB 3596

The FTB 3596 is the California's Paid Preparer's Due Diligence Checklist for California Earned Income Tax Credit. This form is required if there is a calculation (allowed or disallowed) for EIC on a return. Review the Instructions for Form FTB 3596 for details. Failure to complete the form can result in penalties for the paid preparer.

CA CPAs should leave the Registration Number field blank in Setup > Preparers and Users to allow the check box CPA to be marked on Form 3596. The Power of Attorney Information section on Setup > Preparers and Users should be completed instead.

Prevent Form FTB 3596

If you feel the form is unnecessary because of a known disqualifying factor, you can suppress the EIC calculation, thus removing the form requirement. To do this:

1. Go to the CA screen EIC

2. At the top of the window, select the box, Check this box to suppress the CA EIC calculation.

3. View the return.

4. The form should no longer produce, because there is no calculation taking place.

EIC Calculation Disqualifiers

Similar to the Federal EIC calculation, there are a number of factors that determine if the taxpayers return can qualify for EIC. The table below highlights the main factors and the conditions that cause disqualification.

Factor	Disqualifying Condition
Filing Status	Married Filing Separate
Federal AGI	Greater than applicable threshold (based on number of eligible children)
CA Investment income was	Greater than the yearly threshold
Taxpayer or Spouse ID numbers	No valid SSNs for employment
Federal Form 2555 or 2555-EZ	Is Present
Taxpayer and spouse Residency	Non-Resident Aliens at any time during the year
Primary Residence	Not located in CA at least half of the year
Taxpayer or Spouse Age	Under 25 or Over 65
CA Earned Income	Greater than the yearly threshold-- credit reduced or eliminated depending on the income amount.

See CA Form FTB 3514 Instructions for additional direction regarding CA EIC.

Common EF Messages

EF Message 0800

1. Review the mailing address that is present on screen 1.

   • If this address should be a California address, make the necessary changes so that it does reflect California, and recalculate the return.

   • If this address should not be a California address continue to Step 2.

2. Go to Data Entry> States tab > California > General tab > EIC2 Dependent information for EIC Screen.

   • Select Qualifying Child SSN from the drop down menu at the top of the screen

   • Press tab on your keyboard to auto fill the Child's First Name and Child's Last Name.

   • Fill out the address section on the bottom of this screen with the California state address, where the dependent lived for the previous year.

EF Message 0044

1. Exit the client return and return to the Home screen of Drake Tax.

2. Go to Setup > Preparers and Users.

3. Double click on the name of the preparer receiving this error.

4. From the Preparer Setup menu, locate the Power of Attorney Information section on the right side of the screen.

5. In the field labeled Jurisdiction the 2 letter abbreviation for California (CA) should be entered.

6. Click Save.

Once the 2 digit state code has been entered in the Setup > Preparers and Users, the message should be cleared.