You’re getting that error because the Other State Tax Credit (Schedule S) is only for full‑year California residents. As a part‑year resident, you should instead allocate your income between states so California only taxes the CA‑resident portion.
Here is how to fix this:
- Residency: In the CA interview, confirm “Part‑year resident” with your move date in 2025.
- W‑2 allocation: For NY‑sourced wages you earned after moving to CA:
- Ensure your New York nonresident return (NY IT‑203) includes those post‑move wages as NY‑source, and
- In the CA interview’s “Income Allocation” section, allocate wages by state and by residency period per the prompts. Do not force the Other State Tax Credit; remove it if present.
- Remove the OSCT entry: In California > Credits and payments > Other state tax credit, set it to No. That clears the Smart Check error.
