TT Home and Business: CA 540NR - Reporting CA Business Income

[soho333]

Hi,

I am filing as a California Non-Resident.  In the TT interview section for CA 540NR, the screen for California Business Income and Loss, there is a Federal Adjusted number pre-populated by TT.  For the California amount field, should I be using gross receipts for the total CA amount or an adjusted amount like the Federal Adjusted?  If it is adjusted, would that be Ordinary Income (gross receipts - deductions) from Form 568 Line 23?

Appreciate any insight on this.

[AliciaP1 · Accepted solution]

It depends.  The amount should be the net income earned in California.  So, if your business earned income in CA but had no expenses attributable to it, then it will be gross income from CA.  If your business operated in CA for a time and earned income as well as incurred expenses specific to the CA income, then it will be that net income.

[soho333]

Thanks for responding @AliciaP1 .  All the income for my business was from California sources with business expenses carried over from my Federal return.  Since Form 568 Line 23 shows these deductions against my gross CA income, giving a net income number, it seems that Line 23 would be the one - please confirm.  Sorry for asking this question, just trying to be extra cautious on this.  Thank you again!

[AliciaP1 · Accepted solution]

Yes, line 23 from Form 568 would be correct in your case.

@soho333