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oboero2
Returning Member

Which part of the payroll tax is deductible for California return?

I am using Turbotax Business, working on C-corporation return for the state of California.

According to the explanation, "Unlike federal law, California does not allow a deduction for California franchise or income tax, or for any other tax based exclusively on, or measured by, income."(pics attached)

 

These are the breakdown of the $2243 payroll tax (employer portion of the payroll tax paid):

Social Security: 1568.6

Medicare: $366.85

FUTA: $63

CA SUI: $238

CA ETT: $7

 

Which part of these are non-deductible, and what do I enter as "Taxing Authority"?

 

payroll tax exp.jpgpayroll deduction.jpg

 

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3 Replies
DianeW777
Expert Alumni

Which part of the payroll tax is deductible for California return?

All employer payroll taxes are deductible, including all state income tax withheld for their employees.  There is none that are not deductible when it comes to payroll taxes. I would caution not to include here any taxes withheld and paid on behalf of your employees that is already included in gross wages expense.

 

What they are explaining is that state income tax is not deductible that was paid by the business on their net profit. No California franchise or state income tax the business had to pay on it's own net income can be deducted by the business.

 

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oboero2
Returning Member

Which part of the payroll tax is deductible for California return?

Oh I see thank you so much! For the "Taxing Authority," can I just leave it blank then?

BrittanyS
Expert Alumni

Which part of the payroll tax is deductible for California return?

Yes, if it is already included in gross wages you will leave it blank.

 

@oboero2 

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