Hello all,
In 2017, we had a baby and because of this event there was a w2 sent to us from Insurance company which my employer used for maternity/paternity leave. This w2 had income of $30,962 which turbo tax entered as subtractions on CA 540 on line 7. The question is was turbotax wrong to subtract this on line 7 or Is state wrong on saying this amount should not be subtracted.
These are the values from w2 in question:
Box 1 (Wages): 30,962
Box 2 (fed tax withheld): 5,976
Box 3 (SS wages): 17,553
Box 4 (SS tax withheld): 1,088
Box 5 (medicare tax withheld): 255
Box 13: Third-party sick pay checked
Box 16: (State wages): 24,188
Box 17: (State income tax): 1,604
This income is taxable in California. This California memorandum explains (click on link): California tax of third-party sick pay. Based on the information you post from the information on that W-2, it looks that while $30962 of the third-party pay is taxable Federally, California considers $24188 to be taxable in the state. Read through your notification to verify whether or not this is the case.
If you feel that the program may have calculated this in error, contact the Audit Support team for assistance. For instructions, please see this link: What is the TurboTax Audit Support Guarantee?