State tax filing

TurboTax is not currently wrong with how they are handling it, however they were wrong a few weeks ago. Please read my whole answer that I posted on 4/1/2021 (and no, my answer wasnt an april fools joke haha).

In the end I dont think I totally wasted my time because I finally worked through everything that TurboTax is doing on the federal and state returns, and turbotax is NOT charging you for CA unemployment on your CA state taxes! I wrote all of that to help people fully understand TurboTax's workflow which turbotax should have documented. (Which I go over in my very long write-up that you accuse me for wasting my time on...it was a painful waste of personal time, but only a waste because TurboTax should have documented all of this to prevent the confusion and I wouldnt have had to do my own write-up on this...its not a total waste if other people benefit from what I wrote).

***Anyways, if you canceled out your unemployment and manually overrode what TurboTax had input on your California state tax return (and you did this within the last week), then your state tax return is incorrect now unfortunately and you should go back and undo your changes or amend your return now.

Again, as of the time of my confirming everything last night when I documented this issue, TurboTax is NOT actually charging you for any California state unemployment income despite it admittedly looking very confusing within the TurboTax Online application. If you follow along with what TurboTax is actually doing on the actual Form/Schedule CA and Form CA 540, you will see that TurboTax is using your total income that you entered into your federal and/or state returns already via your W2s and 1099s etc (in which the total income that TurboTax is using for your state return does *NOT* include your state unemployment income factored into it for the state taxes...aka turbotax is NOT including your state unemployment into your total income amount), and then later on turbotax inputs your California Unemployment Income and then cancels it out again, so that you are not actually being taxed for it AT ALL, even if your CA Unemployment Income is over 10,200 because California does not charge you for ANY unemployment income that came from California as you noted...if you think California is charging you for any unemployment income that went over 10,200 on your federal return due to the federal American Rescue Plan Act, and that your total income amount is incorrect on your CA state tax return in TurboTax, then you should contact TurboTax support to go over it with them to confirm before manually modifying your CA State tax return. **All you really need to do is confirm how much "total income" that TurboTax is INITIALLY pulling into your California State Tax Return. If your CA state tax return starts off with your "total income" not including ANY of your unemployment income amounts included into the "total income" amount, then TurboTax is doing it properly. If turbobax IS bringing in your federal total income into your CA state return that includes any amount OVER 10,200 of unemployment that you earned, then yes, you need to Preview your turbotax state tax return to make sure that they are properly canceling out the extra CA Unemployment income that went above 10,200 on your federal total income amount....but I dont see how that is broken either at this point with how turbotax is canceling everything out properly now. I hope this makes sense as to how Im describing it. You need to be careful that turbotax did not already properly cancel out your state unemployment income and then you discounted yourself the full amount of your state unemployment income AGAIN which would give you a way bigger return than you are due.

Once more I hope this makes sense to you. But i want to ensure that anyone else who comes into this thread is not confused by your statement conflicting with my statement.

TurboTax is NOT charging us any taxes for any amount of our California State Unemployment on our California STATE returns (again the FEDERAL return will charge you on the unemployment you made ABOVE 10,200 while any amount BELOW 10,200 will not be charged for taxes, and turbotax is doing it properly as of the time of my writing/this post).

Again please read my much longer reply from yesterday as I break all of it down. If you dont want to read the entire thing then thats on you. If you feel that your unemployment income numbers are off on your state return then its possible that your unemployment was entered incorrectly on your federal return as well, or you modified the federal yourself as well due to confusion, and that is causing TurboTax's normal unemployment tax workflow to break on you maybe...but Im just guessing since Im not seeing what's on your end. In general from all of my own discovery, everything looks to be fine now on TurboTax's end with how theyre essentially working to cancel out our Unemployment taxes in our Federal and State returns.

Good luck my friend, I hope this makes sense to you and possibly helps.