Original poster here. Well after three years of incorrect calculations (2018, 2019, and 2020), it looks like TurboTax Deluxe 2021 finally gets this right, at least for my situation.
The California Deductible Home Mortgage Interest Worksheet (Ded Home Mort) now has a Part 3 section that starts with, "Your state allows for an additional mortgage interest deduction on up to $100,000 of non-acquisition debt."
Sure enough, it calculates the "total deductible home mortgage interest" that I should get in California as equal to the interest reported on form 1098. It even correctly reduces that for the amount adjusted on form 8829 (home use deduction for my business). Then it makes the corresponding adjustment on Schedule CA.
I'm glad that this three-year bug appears to finally be fixed. I wonder how many tens or hundreds of thousands of dollars went into California coffers due to this Intuit error. Do they go back to notify users, "Oops sorry, we told you to overpay; you should re-file the last three years"?
