Does Turbo Tax allow you to deduct eligible moving expenses for state taxes in California? If so, where in the online tax filing process does this happen?

Yes, TurboTax allows you to deduct eligible moving expenses for your California state return, even though these deductions were suspended at the federal level for most taxpayers starting in 2018. Because California does not conform to the federal suspension, you can still claim them on your state taxes if you meet the state's eligibility requirements. 

Where to Enter Moving Expenses in TurboTax

In the TurboTax Online process, you must enter this information in the Federal Taxes section first. The software will then automatically "flow" or transfer this data to your California state return. 

1. Federal Taxes Section: Go to the Deductions & Credits tab.
2. Locate Moving Expenses: Scroll down to the "Other Deductions and Credits" section and select Start or Edit next to Moving Expenses.
3. Answer the "PCS" Question Carefully:
   • The software will ask if your move was due to a Permanent Change of Station (PCS) for military orders.
   • If you are not military, answer "Yes" initially to bypass the federal block and enter your expense details.
   • Crucial Step: After entering your information, return to the summary screen, select Edit, and change that answer back to "No".
   • The federal return will correctly show you do not qualify for the federal deduction, but the data will remain in the system for your state return.
4. State Return Review: When you later work through the California State interview, the software should prompt you to review the moving expenses for Form FTB 3913. 

To qualify for the deduction in California, you must meet two primary tests: 

• Distance Test: Your new principal workplace must be at least 50 miles farther from your old home than your old workplace was.
• Time Test: If you are an employee, you must work full-time in the general area of your new workplace for at least 39 weeks during the first 12 months after you move.