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CA tax calculation starts with the Federal AGI. The AGI reflects adjustments for the deductible part of the self employment tax as well as self employed health insurance on Schedule 1. No further adjustments are required on the CA return.
No. CA requires an adjustment to self-employment taxes for self-employed taxpayers classified as employees by the state of California. Some individuals may be classified as independent contractors for federal purposes and employees for California purposes, which may also cause changes in how their income and deductions are classified. Proposition 22 was operative as of December 16, 2020, and may affect a taxpayer’s worker classification. The adjustment mentioned above is for these independent contractor/employees.
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