State tax filing
You are allowed to take the claim of right deduction or the credit on your California return. You can choose what method provides you with the best tax benefits.
Per the 540 CA Instructions, if you are claiming a credit on your federal tax return and are deducting the repayment for California, enter the allowable deduction on line 16, column C.
- To enter information on Line 16, column C, of Form 540, please enter the amount on the appropriate line using Forms mode in TurboTax Desktop.
If you choose to take the credit instead of the deduction for California, add the credit amount on line 78, the total payment line, of Form 540. To the left of the total, write “IRC 1341” and the amount of the credit.
- To enter the credit amount on Line 78 of Form 540, you will have to click on the box next in Line 78 using Forms mode in TurboTax Desktop. This will bring you to a supporting schedule, where you would enter IRC 1341 and the amount.
