The amounts used on your state return (CA Form 540) flow in from your Federal Adjusted Gross Income, which does not include the first $10,200 in unemployment income per the changes instituted by the American Rescue Plan.
IRS Statement on American Rescue Plan
You will see the normal reduction of unemployment on Schedule CA, line 7, Column B as California does not tax unemployment income.
On your Schedule CA, the amount is added back on Line f, column C. This essentially creates a $0 effect on your state return to ensure your unemployment income is not excluded twice.
It is a bit confusing but your California return should be correct as long as you entered your input in the federal section of the program and did not make any adjustments in the state interview section of the program.
@Enigma007
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