Original Question:
My daughter is a student in CA and earned money during the school year working at the school. She is filing a CA tax return as a nonresident and is required to complete CA Form 3800 (she is also filing a federal return and a MO state return as a resident). Her parents are not residents of CA and do not file any state return in CA. Two Questions-
1. CA Form 3800 asks for information from the parents return- since the parents are not residents of CA and do not file CA state tax returns, how should this information be completed in turbo tax? Should the parent information be filled in as "0" or left blank or completed based on the information on their federal return?
2. My daughter has wages from her school job in CA (approx. $900); wages from a summer job in MO (approx. $5300) and passive income (approx. $2700)-
a. Since she is nonresident in CA, does this passive income get included/taxed in the CA return (I thought I read that CA only taxed amounts earned in CA for nonresidents)?
b. Based on the level of earnings in CA, does a CA tax return need to be filed?
Original Answer (From Vanessa A- employee tax expert):
No, she does not need to file a CA non resident tax return since her income was less than $12,950.
If you can be claimed as a dependent on another person's tax return, you have a different standard deduction. It cannot be more than the normal standard deduction. Your standard deduction is the larger of:
- Your earned income plus $350, or
- $1,100 for the taxable year
However, if she had CA taxes withheld, she may want to file to claim a refund of the taxes withheld.
She does not need to file form FTB 3800 since the passive income is not from CA. Therefore, you do not need to include your income on the form. Instead, as you walk through the CA return, this income should be removed from her CA income. You can then go to Tax Tools>>Tools>>Delete a Form>>Delete FTB 3800 to remove that form from the return.
Follow Up Question:
Thank you. A couple points of clarification/additional information- First, my daughter can be claimed on another tax return; but is not claimed on another return. Second, her standard deduction on both the federal return and MO state return is $6625 (earned income plus $400). Third, in turbo tax, the CA Form 3800 auto calculated the line 1 amount (child's unearned income- interest, dividends, capital gains) as the difference between her AGI and her earned income. This amount (approx. $2700) was greater than the line 2 amount of $2300. Fourth, there are no CA taxes withheld from her CA earnings.
1. Does the above additional information impact the conclusion that there is no need to file a CA tax return (her total income/AGI was greater than her standard deduction of $6625; but not greater than $12,950; the difference between total income/AGI and standard deduction was all passive income earned outside CA)?
2. How would I correct the CA Form 3800, line 1 amount (that turbo tax is populating) that is showing the approx. $2,700 of unearned income? Shouldn't line 1 on CA Form 3800 be $0 (if all passive income was earned in state of residence-MO)? I think you are suggesting in your reply to delete the entire Form 3800? Or do I override the Line 1 amount and input a $0?
