How to enter a 1099Misc from a summer research fellowship

[DC05]

My daughter has filed her Federal and State (CA) tax with turbotax with the fellowship money as earned income. We just got a letter from CA FTB stating that she calculated her CA standard deduction wrong. Instead of using "CA Adjusted Gross Income + $450" as the standard deduction, it should be $1300.  As a result, she owes a small tax. Does CA treats fellowship money differently from federal? Did TT do the calculation wrong? Any insight from someone who is familiar with CA tax is much appreciated.

[Hal_Al]

I'm not familiar with CA rules.  That said, two things:

1. If the income was correctly reported on line 8r of federal schedule 1, and CA FTB is saying it's not earned income, there's a good chance that that is their position. On the other hand, this is the first time this has come up, in this forum, to my knowledge. 

2. You may want to post a fresh question, in the "state" section (rather than "education") to get more CA "eyes on" on your problem. 

I have notified TT of your situation. 

[Hal_Al]

@DC05  Where on your federal form was the scholarship reported?  Was it line 8r of Schedule 1 or somewhere else?  

[LenaH]

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent” *
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number (including the dash) that was generated in the response.

*(If using a MAC, go to the menu at the top of the screen, select Help, then, “Send Tax File to Agent”)

@DC05 

[DC05]

Sorry for the late response. I didn't get an email notification of your message for some reason and I just saw this. 

The fellowship was reported on line 8r of Schedule 1. 

Thank you for contacting Turbotax for me. I will be sending information to them to look at.

[DC05]

Sorry for the late response. I didn't get an email notification of your message for some reason and I just saw this. 

I have asked my daughter to send over the diagnostic file. Token number is 50049-86175911

Thank you for looking into this.