To get rid of CA form 3554, you need to delete the CA return and start over. Make sure that you do not go into the "New Employment Credit Recapture."
To remove a state from your return in TurboTax please follow these steps:
CD/Download [Desktop version]
- When you are in the federal return, click on File (in the black bar at the top of the screen) > Remove State Return. [See Screenshot #1, below.]
- A list of state returns currently in the return will appear. Click on the one you want to delete to highlight it and click Remove. [Screenshot #2]
TurboTax Online
You can delete your TurboTax Online state return as long as you haven't paid for it yet (or registered in a free version):
- Sign in to your return, if you're not already signed in.
- Click State Taxes near the top of your screen and proceed to the Status of Your State Returns screen.
- On that screen, click the Delete link right next to the Edit button, and then answer Yes. [Screenshot #3]
If you don't see the Edit or Delete button on the Status of Your State Returns screen and haven't paid or registered, please do the following:
- Click State Taxes.
- Proceed to the Status of Your Returns screen.
AshleyRose explains how form 3554 was generated in your return:
Most likely what happened is when you got the portion of your CA state return that says " Credit and Taxes" if you scroll down the page there is a section called "Credit Recapture" and right underneath it says, “New Employment Credit Recapture. Learn More". Clicking start on this portion brings you to a screen that says, “New Employment Credit Recapture". Here you will see "where it says "New Employment Credit Recapture" and there is a box where there must have been a figure inserted, most likely "0" if you did not need this credit. Putting a figure in that box automatically populated that form causing it to now give you errors on the State Return review asking numerous questions about form 3554. Unfortunately, at this point you cannot go to delete a form or even go back to that box and remove the "0"
