KJEM
Level 2

CA SS being taxed

CA claims it does not tax SS but if you are paying federal taxes on your SS only that amount is subtracted from your CA income.  So if you are paying Federal taxes on 85% of your SS you will also be paying CA taxes on 15% of your SS.   How can CA claim it does not tax SS?

BillM223
Expert Alumni

Deductions & credits

This is how I answered in the other thread:

 

Suppose you received $12,000 in SS benefits, and that because of other income, 85% of your benefits were taxed ($10,200).

 

When the federal numbers come over to CA, CA starts with the federal Adjusted Gross Income (AGI) on line 13 of form CA 540. In that AGI number, the $1,800 that is not taxed on the federal is not present - so the $1,800 is not taxed in CA.

 

And as Isabella pointed out, on line 14, the $10,200 will appear as a subtraction, to subtract out the taxable portion of the SS benefits on the federal return.

 

So the $1,800 is not taxed in CA and the $10,200 is not taxed in CA, and together these add up to the original $12,000. California does not tax SS benefits.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
KJEM
Level 2

Deductions & credits

I realized my mistake in looking at this after I posted it.   Good explanation - thank you!