Thank you again. In answer to the questions below:
1. I went back through the adjustments section of turbo tax CA return and believe I have indicated correctly that none of the passive income (dividends and capital gains) are CA related. I believe I have done this correctly, as when I look at Schedule CA (540NR), the only amounts showing in column E (California Amounts) is my daughter's W-2 wages earned in CA (dividends and capital gains show $0 in column E) and
2. yes, my daughter is filing a 540NR return.
After the above, Form CA 3800 still appears in the file and shows all her passive income on line 1. On schedule 540NR (line 31), turbo tax still indicates it will calculate the tax based on "FTB 3800". Since I have no way of changing CA 3800 or the method to calculate the tax on 5540NR line 31 (and I believe I have entered the information correctly in turbo tax), I deleted CA Form 3800 from the turbo tax file and now turbo tax is calculating tax owed based on "tax table" (and indicates that on line 31 of 540NR). Based on this calculation, she owes $4 on her CA income only.
However, when turbo tax performs its state tax return check, it finds a number of errors (all related to parents info for CA Form 3800). When I enter $0 (as parent does not file in CA in response to the error check), CA Form 3800 appears back in my daughters return and the FTB 3800 box gets checked on 540NR line 31; however, the tax due remains $4. I am guessing CA Form 3800 is required to be completed and filed based on the turbo tax check process.
My remaining questions-
1. Is CA Form 3800 required or not? (I am guessing CA Form 3800 is required to be completed and filed based on the turbo tax check process putting the form back in the return)?
2. If the standard deduction is earned income plus $350 and you only need to report CA income on the CA540NR return (and her CA income is $900), shouldn't the tax liability be $0 as the standard deduction would be greater than income? If so, would you need to file a return?
