DianeW777
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State tax filing

For California the instructions for CA Adjustments are printed here for your convenience. Whether you used this bonus repayment as a deduction or a credit, you will apply it the same way on the CA return.

 

Schedule CA-Line 16 - Other Itemized Deductions - Claim of Right

 

If you had to repay an amount that you included in your income in an earlier year, because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Or, if the amount you repaid is more than $3,000, you may take a credit against your tax for the year in which you repaid it, whichever results in the least tax.

 

If the amount repaid was not taxed by California, no deduction or credit is allowed. 

 

If you claimed a credit for the repayment on your federal tax return and are deducting the repayment for California, enter the allowable deduction on line 16, column C.

 

If you deducted the repayment on your federal tax return and are taking a credit for California, enter the amount of the federal deduction on line 16, column B.

 

To help you determine whether to take a credit or deduction, see the Repayment section of federal Publication 525, Taxable and Nontaxable Income.

 

Note: Remember to use the California tax rate in your computations. 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 the Form 540. To the left of the total, write “IRC 1341” and the amount of the credit.

 

Taking the credit will require TurboTax Desktop.

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