topic Turbo tax adds in unemployment to my California state adjustments and won't let me take it off. How do I take it off the chart for state taxes? in State tax filing

Turbo tax adds in unemployment to my California state adjustments and won't let me take it off. How do I take it off the chart for state taxes?

kidsandmama — Fri, 26 Mar 2021 01:51:29 GMT

I shouldn't be taxed since my unemployment is less than $10,200.

Re: Turbo tax adds in unemployment to my California state adjustments and won't let me take it of...

BillM223 — Fri, 26 Mar 2021 02:25:36 GMT

"Turbo tax adds in unemployment to my California state adjustments "

Is this an addition or a subtraction to your California state income?

California does no tax unemployment income (this was true even before the latest federal changes).

As the State of California says,

"Make a subtraction adjustment on the unemployment compensation line, in column B, of California Adjustments – Residents (Schedule CA 540)."

Is this where this adjustment is? Then it is in the right place.

Re: Turbo tax adds in unemployment to my California state adjustments and won't let me take it of...

kidsandmama — Tue, 30 Mar 2021 00:09:09 GMT

It looks to me that it is an addition.

This is what it looks like on the Turbotax page. The title is:

Here's the income that California handles differently (There are 4 categories)

Employee Business Expense

Unemployment Income Exclusion

Miscellaneous California Adjustments

Other Adjustments to Income

So, Turbotax lists the amount I received for unemployment in "Unemployment Income Exclusion." I am assuming Turbotax subtracted my unemployment from my income? I don't know that for sure. Then in the last category- "Other Adjustments to Income", my unemployment is listed again. It is the same monetary values as the second category (Unemployment Income Exclusion).
When I click on the edit/start button, it shows that my unemployment is an "Addition". Why is that? It seems that it should be a "subtraction."

Can you help with this?

Thank you.

Re: Turbo tax adds in unemployment to my California state adjustments and won't let me take it of...

JotikaT2 — Tue, 30 Mar 2021 14:21:49 GMT

The unemployment compensation is actually zeroed out on your state return for California.

The amounts used on your state return flow in from your Federal Adjusted Gross Income which does not include the first $10,200 in unemployment income per the changes instituted by the American Rescue Plan.

IRS Statement on American Rescue Plan

You will see the normal reduction of unemployment on Schedule CA, line 7, Column B as California does not tax unemployment income.

On your Schedule CA, the amount is added back on Line f, column C. This essentially creates a $0 effect on your state return to ensure your unemployment income is not excluded twice.

Re: Turbo tax adds in unemployment to my California state adjustments and won't let me take it of...

rk666 — Mon, 17 May 2021 19:59:11 GMT

so it's ok that we see a strange UCE adjustment for $10,200 under "additions" in the "other adjustments to income" section of CA state taxes with no number under the "subtractions" column of that section? That's normal and the state won't charge us taxes on that chunk of unemployment insurance payments? Because it's confusing as heck to read "additions" and it makes it look like we will be charged.