I have essentially the same issue filing a 2023 California 541 for a trust in which I need to correctly handle the payment made with California Form 593 on a real estate sale. TurboTax has a mechanism to handle Form 593 withholding but at least for today (WinBizRelease version 023x000x0241 [the x's are to avoid it being mistaken for a phone number and deleted]) it is not working in TurboTax for Business.
The problem is that without intervention, TT will treat your withheld tax as a deduction (Form 541 line 11), not a tax payment (Form 541 line 31).
In the California interview section "Other Tax Withholdings", on the first page "Tax Withholding for 2023", answer "yes" to the question "Do you have any California income tax withheld for 2023?" The next page offers you two boxes. One for income tax withholding and the other for "Real Estate or Resident/Nonresident" withholding. Enter the 593 withheld amount here. This amount flows to the Tax Payments Worksheet, Part II, line 2.
The Tax Payments Worksheet has a checkbox to "Transfer withholding from Forms 592-B or 593" that does not seem to appear in the interview. But checking the box manually on the form will result in an error, "CY 592-B Wks/593 Ck Box should not be checked unless there is a completed corresponding Resident and Nonresident Withholding Tax State or Real Estate Withholding Statement". I tried to add a copy of Form 593 but it is not available in this release to add, only various versions of the Form 592 Resident or Nonresident Withholding.
I can force Form 541 to be more correct be editing it: (1) subtract the 593 payment from line 11. This will make it zero if you have no other tax payment deductions. Then (2) add it manually to line 31. Now TT will correctly calculate your tax and refund. However it will also leave you with an error for line 31 because there is no Form 593, and thus makes the return ineligible for electronic filing.
I'll file a bug report if I can figure out how.
