It depends. If this was your principal residence at the time of the sale (meaning you sold a home at least two years ago), then you are correct, and any capital gain excluded, not taxed for federal purposes, has the same treatment on the California (CA) return.
Per CA: Individuals
You do not have to report the sale of your home if all of the following apply:
- Your gain from the sale was less than $250,000
- You have not used the exclusion in the last 2 years
- You owned and occupied the home for at least 2 years
Any gain over $250,000 is taxable.
CA Income from the sale of your home
If you meet the rules above, then a CA return is not required if this is the only income that is attributable to CA.
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