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Get your taxes done using TurboTax
Yes, for California it would be an adjustment on Line 21 "Other Expenses" done the same as the credit that was figured for the Federal tax. Recalculate the California State Tax paid for the prior year and take the difference on Line 21 of California 540.
According to the State of California:
Claim of right – If you had to repay an amount that you included in your income in an earlier year, because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount repaid from your income for the year in which you repaid it. If the amount you repaid is less than $3,000, the deduction is subject to the 2% AGI limit for California purposes. If you are deducting the repayment for California, enter the allowable deduction on line 21.
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