CA Nonresident, unearned income from education scholarship in Michigan. Why is Turbotax adding this to CA form 3800?

Forum|Forum|6 years ago
April 2, 2020
16 replies
109 views

I am a Michigan resident, and attended college in Michigan for 2019. I had scholarships and grants exceed the amount of tuition for that year, so I have some unearned income. Note that this was disbursed to me, a Michigan resident, attending a Michigan college, while I was living in Michigan.

I also earned money while working in California during 2019, therefore I am filing a nonresident return for CA. However, Turbotax is claiming my unearned income from these scholarships on CA form 3800. I have found no way to fix this issue. Is TurboTax calculating this correctly? From my understanding, CA has no right to tax this money in any way.

Note that I am an independent

TurboTax Free Edition Online

hbl3973

Alumni - Champ

thomasbomb,

Let's back up a bit and see if you should even be using form 3000. As you say you are independent, i.e. not a dependent that your parents can claim on their return, did you earn at least half of your support in 2019? That would include college tuition, room & board plus all other out-of-pocket expenses such as rent, food, car insurance, gas and maintenance. If you can say yes to that, then you should be filing just the regular Form 540.

If not, then get back to me and I'll explain how CA part/nonresident tax is determined and h ow that MI income is involved in determining your CA tax rate without being taxed itself.

thomasbombAuthor

Level 2

I paid for my support through earned income, scholarships/grants, and student loans. My earned income is less than 50% of my support, but earned income plus student loans add up to more than 50%.

One of the questions asked if I paid for more than half of my support with earned income, which I responded no to.