State tax filing
I think that the unexpected results are from partial details.
First, if your IRA's were deductible or nondeductible, that matters. It would appear that the 1982-1986 amounts are deductible and should rightly be subtracted.
Second, the records from 1986-1988 may matter. Contacting PERS is your best option to resolve those details to verify that there were no Roth IRAs, for example, that were nondeductible.
Assuming your calculations are correct, do not adjust anything on the federal. Enter the 1099-R exactly as you received it.
I recommend going first to the Federal and deleting and re-adding Form 1099-R if you have any trouble at all with restoring the 1099-R to exactly what you received.
To do this, follow these steps:
- From the left menu, select Federal
- Wages & Income and scroll down to your 1099-R entry. Click Edit/Add
- Click Delete next to it and confirm your decision
- Click + Add 1099-R and re-enter it again
Next, go to California. Follow these steps:
- From the left menu, select State
- Continue and Continue
- Go through the state interview again
- There will be a list of income that California handles differently. Select IRA Distributions
- On the screen Any IRA Distribution Adjustments? Enter your Description, such as IRA Distribution CA taxable amount<Federal, and enter 8,500 in as a Subtraction and click Continue
To reference your research in case others are experiencing similar issues~
From FTB Pub 1005 page 5 and 6:
1987 Through 2001 California law is the same as federal law. The IRA deduction is the lesser of $2,000 or 100% of your compensation. For a SIMPLE IRA, an elective deferral may be made for up to $6,500 for 2001 and $6,000 for 1997 through 2000.
1982 Through 1986 California law was different from federal law. The maximum federal deduction for an individual was $2,000, and was available to active participants in qualified or government retirement plans and to persons who contributed to tax-sheltered annuities. The California IRA deduction was the lesser of $1,500 or 15% of compensation with an additional deduction for a nonworking spouse, for a maximum deduction of $1,750. An IRA deduction was not allowed if you were an active participant in a qualified or government retirement plan or contributed to a tax-sheltered annuity.
Nondeductible Contributions Made Before 1987 If you made nondeductible contributions before 1987, none of your distribution is taxed until you have recovered your pre-1987 basis. Because there was a difference between federal and California contribution limits before 1987, there may be a difference in the California and federal taxable amounts. If there is a difference, make an adjustment to reduce your federal AGI to the correct taxable amount for California. Your adjustment is the lesser of your pre-1987 California basis or IRA distribution included in federal AGI. Use Worksheet I — Part A on page 13 to compute your pre-1987 California basis. Use Worksheet I — Part B to compute your adjustment to federal AGI and your remaining pre-1987 California basis. See Example 1 and Example 2 on page 7. Use Worksheet II on page 13, as a summary of your California basis and its recovery. If you have more than one IRA account, combine all your IRAs to complete the worksheet. If both you and your spouse/RDP have IRAs, you each must complete a separate worksheet based on your own IRA contributions, deductions, and distributions.
