You are correct, unemployment income is not taxable in California.
The amounts used on your California return 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
Your California return has been updated to reflect all of these changes. 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.
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