I believe the position of the CA FTB is:
"Note for California taxpayers: The California Franchise Tax Board (FTB), in its role as the State's tax authority, has determined that current California State tax law does not conform to the new federal tax treatment. This means that, for California taxpayers, the earnings portion of any distribution from any 529 plan to pay for tuition expenses at a public, private or religious elementary, middle, or high school or any amount rolled-over from a qualified tuition program to an ABLE account may be subject to California income tax and an additional 2.5% California tax."
My question is, how do I enter this in TurboTax? I can enter the earnings portion in the "Expanded use of 529 funds" box [CA(540) Section B, line 8, (f) "Other"], and that will add the earnings back to my CA income, but I don't see a place to enter the 2.5% penalty. I see no instructions for the penalty in the FTB instructions.
