Were the amounts entered for California on your 1099-DIV all tax-exempt for both your Federal and California returns?
Some federal tax-exempt dividends are not always tax-exempt for state. State-taxable dividends often come from mutual funds or Exchange Traded Funds (ETFs) that hold a multi-state portfolio of municipal bonds.
All of the income from those bonds, other than than those issued within your home state, are taxable by your home state.
Click this link for more info on California Tax Exempt Dividends.
From the California Form 540 Instructions:
"Certain mutual funds pay “exempt-interest dividends.” If the mutual fund has at least 50% of its assets invested in tax-exempt U.S. obligations and/or in California or its municipal obligations, that amount of dividend is exempt from California tax. The proportion of dividends that are tax‑exempt will be shown on your annual statement or statement issued with federal Form 1099-DIV, Dividends and Distributions."
Since we can't see your tax return in this forum, you can request an Offline Review for a tax expert to review your return.
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