My daughter has filed her Federal and State (CA) tax with turbotax with the fellowship money as earned income. We just got a letter from CA FTB stating that she calculated her CA standard deduction wrong. Instead of using "CA Adjusted Gross Income + $450" as the standard deduction, it should be $1300. As a result, she owes a small tax. Does CA treats fellowship money differently from federal? Did TT do the calculation wrong? Any insight from someone who is familiar with CA tax is much appreciated.
