CA State Business Form 568 adding adjustments to state income

[Jeddy62]

I received the Ca Small Business Covid - 19 Relief Grant in 2021.  This is taxable for Fed but not taxable for CA.  I have included in the 1065 as other income.  How/Where do I put in the adjustment for CA income?

[MaryK4]

You will want to enter it in the California state section of TurboTax- look for the "Enter amounts received pursuant to the COVID-19 Relief Grant included in federal income" (see below).

The California Small Business COVID-19 Relief Grant Program (the “Program”) provides micro grants ranging from $5,000 to $25,000 to eligible small businesses and nonprofits impacted by COVID-19 and the related health and safety restrictions.

Governor Newsom signed into law a comprehensive package providing urgent relief for the small businesses of CA. The package provides $2 billion for grants up to $25,000 for small businesses impacted by the pandemic.

[Jeddy62]

Thanks for your response.  Unfortunately the question you show is not popping up in my state interview and I can't find it in the forms.  I have downloaded all updates. What is the path to get to the question so I can answer yes?

[MHhri]

I am using Turbo Tax Business State 2021 to prepare my CA Stata Tax Return for my S-Corp. The S-Corp did receive the CA Relief Grant and thank you for posing how to adjust it. However, I CANNOT find the screenshot you showed in your answer! How do I get to it so I can enter the amount so that it will still be shown as Income in Federal tax return but it will be non-taxable in CA. PLEASE show me step by step how to get to the screenshot you showed so I can finish my S-Corp Taxes.

Thanking you in advance!

MHhri

[Jeddy62]

I have tried various methods to let Turbo Tax know about this error, but to no avail.  The screen shot related to the CA relief grant was not entered by me, but by another community member, so I don't know how to get there myself.

The way that I solved for this error in the CA program is:

Add the CA relief grant at All Other Income on the Federal interview, with the description if  "CA Small Business Covid-19 Relief Grant" and the related amount.  This enters the description and amount on line 7 of Federal Form 1065 and after state transfer also adds it on Line 10 of Schedule B on CA form 568.

To remove this from the CA return you need to go in the Forms view.

Select Form 568 p1-4 form

Go Schedule B - Income and Deductions

Line 10 - Other Income. Attach Schedule

Override the information on line 10 by highlighting and selecting the "Edit" option in then menu and then "Override" for the description and the amount.

The CA form then treats this as an CA adjustment to income and flows the amounts to K-1.

Good luck