Deductions & credits

The deductible mortgage interest on a mortgage loan originated in 2016 was $1,000,000 for married filing joint and single ($500,000 for married filing separate).  The mortgage loan must be used to buy or build your home that secures the loan.

You mentioned Turbo Tax worksheets didn't support the adjustments on form 540 Schedule CA. The state of California does not conform to the new federal law that limits taxpayers to the interest on $750,000 ($375,000 for married filing separate) of home mortgage acquisition debt. California allows taxpayers to deduct interest on loans up to $1,000,000 ($500,000 for married filing separate). Note: The loans originated on or after December 15th 2017 don't need adjustment..

Enter the amounts you did not deduct on the federal return that were limited. This would be on the amount of the loan over $750,000 (but not over $1,000,000) plus any amount of home equity loan interest you paid. To enter the California adjistment.

• In Tax Home Screen, click State.
• click continue until you get to "Here's the Income that California Handles Differently".
• Scroll down and choose Home.
• Click Start on Mortgage Interest Adjustment.  See California adjustment screenshot.