Yes, you still have to file both states. Doesn't matter that you will show a loss on paper. It is very uncommon for rental property to ever show a taxable gain - especially if there is a mortgage on the property. In fact, you will show ever increasing losses each year that will continue to increase and accumulate with each passing year. But in the year you sell or otherwise dispose of the rental property, that is when you will have a taxable gain which will include the depreciation recapture.
But the bottom line is, if you have an income producing resourse in CA (such as rental property) then you are required to report the income and expenses to both CA and your home state if your home state also taxes personal income.
WHen doing this with Turbotax it is important that you complete the non-resident return *FIRST* and do your resident state return last. This will allow the program to take into account any reciprocal tax agreements that exist between your resident and non-resident state, and adjust/credit your resident state taxes accordingly.
