Schedule CA 540 appears to have a problem with CA tax exempt interest dividends. It is not deducting the CA (>50%) dividends correctly. anyone else having this problem?

[barbbcls]

Yes - having same problem!

[Phil]

Make sure you split up the tax exempt interest dividends on your federal return.  Select CA and then enter the amt, the Select VARIOUS and then enter the amt.  These will carry over onto State.  When you get to State make sure you enter, on the Tax Exempt Interest Smart Worksheet line C, ONLY the amount of line B that was not CA deductible.  That was the mistake I made.  I entered the entire amount of non-CA tax deductible, which included the tax exempt interest dividends that did not pass the 50% rule.

[CarolC · Accepted solution]

Make sure you properly account for your California dividends on your federal return first.  After you enter your dividends on your federal return, TurboTax will ask Which state is your tax-exempt dividends from?  On the same page, you can select the state that applies.  The information will then carry over to your California tax return.

[barbbcls]

Edited CA tax exempt dividend amount in Fed Form under item 10 so show am't CA deductible & am't not.  It is not carrying over to Calif. Form 540 CA.  Have tried several times.  How can I fix this?