California - Non-residency status wrongly filled by TurboTax

Bumping this up to get help from TurboTax experts. Thanks !!

This is the correct form.  Form 540NR is the "California Nonresident or Part-Year Resident Income Tax Return" and is the appropriate form for any taxpayer who did not reside within the state, or is otherwise deemed a full-year resident for the entire year.

Thanks @SusanY1  for clarification. 

A)

Here is my main issue with the way TurboTax has filled in the following 2 questions in 540NR 

4) I became a CA nonresident (enter new state of residence and date (mm/dd/yyyy) of move). / / / /

5) I was a CA nonresident the entire year (enter state of residence )

Since i was resident for the first 34 days of 2019, I expect Turbotax to fill in question for 4 specifying my date of move. Instead it leaves it BLANK and fills in answer to question 5. So this is going to  convey wrong info to IRS stating i was non-resident for the entire 2019 year (though i stayed in california for 34 days). Should i fix this ? if so, how? 

B)

Note that my domicile has been changed to foreign country in 2019. Not sure if that's the reason for mentioning me as non-resident for the entire 2019 year. pls share ur thoughts. 

Thanks @SusanY1   for timely help.

If you literally moved to the foreign country - meaning you abandoned your domicile (your main, permanent home) in CA and established a new domicile in the foreign country, then for tax purposes you are are part-year resident of CA.  You became a resident of the foreign country, and ceased being a resident of CA, on the day you began living in your new domicile in the other country.  You have to enter that date into TurboTax; TurboTax has no other way of knowing that information.

On the other hand, if you kept your CA domicile, and you are living in the foreign country on a temporary or transient basis, for tax purposes you would remain a full-year resident of CA for 2019.  

You'll find all of CA's rules on residency in this reference:

https://www.ftb.ca.gov/forms/2019/2019-1031-publication.pdf

Thanks  @TomD8 for the details.

I expected TurboTax to treat me as part-year resident.

I answered the TurboTax state-tax questionnaire accordingly.

For the question - "Were u non-resident for complete 2019". I answered No.  I even mentioned that i was out of state after 34 days (afaik, It did  not provide me a option to enter the date of my move for state returns)

But somehow Turbotax is NOT transferring this info properly to 540NR. :(

I have no way to correct the info in the generated 540NR.

In the personal info section of TT, make sure you selected "Foreign or US Possession" as your State of Residence.  Answer Yes to living in another state, and select CA.  For the date, enter the date you began living in your new foreign home.

Thanks @TomD8  for this immense help.

After I made this change (esp specifiying that i moved out to foreign country from CA in the TT personal info section), it has helped fix lot of issues.

  a) I am considered part-year resident in california tax return

b) my date of move shows in lot of worksheets.

Thanks a bunch for helping me avoid this mistake.

But the original issue i mentioned in the first post is still there :(.

In 540NR (Schedule CA) , for the following question, TT is leaving it blank rather than marking my date of move.  "4. I became a CA nonresident (enter new state of residence and date (mm/dd/yyyy) of move)"

I will try to play around a little bit more to find a solution.

Thanks again !!

Just for reference: here is another discussion about the  same problem

https://ttlc.intuit.com/community/state-taxes/discussion/california-ca-sche[product key removed]/01/1627705/highlight/false#M70427

Has anyone found a solution for this? I am facing the same issue for 2021 taxes

Hi,

Was this eventually resolved? I am filing my taxes currently and see the same bug. Schedule 540NR isn't filled completely.

i.e this is left blank, even though I have specified I have moved to a different country in 2023.

I became a CA nonresident (enter new state of residence and date (mm/dd/yyyy) of move)

If you were a part-year resident of California in 2023, you should file a part-year resident California return.

As a part-year resident, you pay tax on:

• All worldwide income received while a California resident
• Income from California sources while you were a nonresident

See this California webpage for more information.

TurboTax should complete the correct forms, depending on your entries. The California interview allows you to make adjustments for income that shouldn't be taxed on your California return.

Thank you for your response. I am filing as a part year resident for 2023. While Turbo Tax computed that correctly, it didn't fill form Schedule 540 NR completely (as others have said in this thread).

There is no way for me to manually override and fill it. And it seems it has been a issue for multiple years now.

Please clarify what exactly is missing from your California state return in TurboTax.

In order for us to troubleshoot this issue, you can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Desktop users:

1. From the black bar at the top of your screen, select Online
2. Click Send Tax File to Agent
3. Click Send on the message that pops up
4. TurboTax will create a "sanitized" copy of your return information with no personal info
5. Post the 7-digit token number here in this thread

Here are the instructions for TurboTax Online users: 

Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to review your file to see what you are seeing, and we can determine what is going on in your return and provide you with a suggested resolution here in this thread.

Thank you for the instructions. Here is the token number: 1231501.

Also, here is just the California questionnaire answers and the resultant value in the generated form which I believe is incorrect:

Here are the questions I answered to determine residency status for California state returns.

1. Joint Residency Status The Same? No

<Same answers for both of us for the below questions>

2. a. Did you become a California resident during 2023? No

2. b. Did you become a California nonresident during 2023? Yes

2. c. Were you a California nonresident during all of 2023? No

3. Where were you domiciled? Foreign country

4.a. Number of days you spent in California for any purpose? 354 

4.b. Did you own a property or home in California? No

5.a. Were you a California resident before 2023? Yes

5.b. Did you enter California before 2023? Yes

5.c. Did you leave California before 2023? No

6. Period of California Residency Before 2023? Me: 02-15-2016 to12-31-2022, Partner: 11-23-2019 to 12-31-2022

I also have in My Info entered the following:

1. State of residence (on December 31, 2023): Foreign Country

2. Checked the box: I lived in another State in 2023. 

3. Selected California with the date as 12/22/2023.

After this, in the generated Schedule 540 NR form

the line 

"I became a CA nonresident (enter new state of residence and date (mm/dd/yyyy) of move)" is blank

Thank you for providing the file. I reported the issue. 

If you are using the Desktop version of TurboTax, you can go to the Schedule CA and type in the move date directly. 

As you noted, this didn't affect the calculation. Had you had income that wasn't attributable to California in the last few days of the year, you would have been able to identify it in the California questionnaire.

Thank you!

Do I have to pay for the Desktop version, if I have already paid for the Federal and State returns on the online version?

Yes, but contact Turbo Tax customer service in accordance with instructions given in this link to have the charges refunded back to your account.

@onesmallspeck 

Hmmm, I tried. I pointed to this discussion since there is a bug in the software. This is the response I received. Trying to call and explain my situation on the phone, and they said it can't be done. 🤷

--

Try calling 1-800-4-INTUIT (1-800-446-8848). Ask to speak to a product support specialist. They should be able to help.

Hi Dave,

I have called 3 times over the last two days and spoken for hours to the product specialists. They seem to deny the problem is with turbo tax and won't issue a refund. 

I have spent so much time over the phone, and they don't seem to be able to understand what the issue is. This is hopeless.

I have had the same issue. I left California for another country in 2023, while my spouse was outside of the US all year. TurboTax took my inputs and set us both as full-year nonresidents. I spent 6 hours on tech support with 5 different people, including level 2 tech support, and no one could help me. They were puzzled, and every call ended with me being disconnected.

The only way I was able to resolve it was to edit the form online directly. The SmartCheck asked me to fill in line 5 (location of all-year nonresident). Rather than doing that, I did the following. (Caution if you don't know what you are doing, this might mess up your form.)

1. Go to a field on the form that is incorrect. For me, that started on line 1, where it said my status was nonresident instead of part-year resident. I right-clicked the filled-in circle for nonresident and selected "Inspect". This opens a view into the html of the web page focused on the section of html that relates to what you clicked.
2. That section of html will have an attribute called "disabled". Delete that, and if it has an equals sign (=) with more text after it, delete that as well. The field will now be editable in the form.
3. Repeat for all fields that are incorrect. I had to do this for both the nonresident and part-year resident fields in line 1, and the two fields in line 4.
4. Set the lines in the form to the correct values. For me, that was the part-year status, the date I left, and the two-letter code of the destination.

After I did this, the SmartCheck validation completed successfully, and the resulting CA540NR had the correct values.

I think the nonresident section in TurboTax has some serious problems. The date I left only showed up for me if I incorrectly also said that I entered California in 2023 as well. Otherwise, that screen was skipped. However, subsequent times through the California residency section on TurboTax showed that I was unable to set whether I had moved to California in 2023 back to "No".

Hopefully, TurboTax actually fixes this issue that has been present for 5 years. If not, hopefully this will show others how to fix it for themselves.

Hi @Tormyr 

Thank you for your response! I appreciate it, and I wish I had seen it sooner. I have been on call with multiple folks for hour after hour and they almost had me believe the problem was with something I had done.

One of them finally said they could process a refund for TurboTax online (hopefully I will see that money). But I bought TurboTax desktop, and ended up adding information about the dates on CA540NR.