California State tax for a nonresident is computed by using the form "California Adjustments -- Nonresidents or Part-Year Residents Income within form CA (540NR). The computation is complex, but my understanding is that the tax amount X is computed assuming that the nonresident is a resident. Then the tax amount Y is computed after subtracting the income of California Sources earned by the nonresident. The amount of the income tax for the nonresident is X - Y.
In order to prevent double taxation credit is handled in two ways. Each state specifies which method should be used.
(Ordinary Credit) A nonresident can subtract the tax amount paid to California from the tax amount paid to the state of residence as credit.
(Reverse Credit) If a nonresident lives in one of the "reverse credit” states, which include Arizona, Washington D.C., Oregon, and Virginia, the tax amount paid to the state of residence can be subtracted from the amount paid to California.
If the nonresident income is less than the credit, the nonresident income is made 0.
I think Turbotax performs this complex computation correctly.
If you are willing, Section 18002 of the Revenue and Taxation Code (R&TC ) of California can be referred to.
