Are property taxes deductible separately on state taxes in California?

[ScruffyCurmudgeon]

Real Estate taxes paid in California are not deductble on your CFB California state taxes.

There are some deductible expenses, differing now from the new Federal 2018 tax law.

• California does not allow several federal deductions, including deductions for contributions to a health savings account (HSA), adoption expenses, federal estate taxes, educator expenses, qualified higher education expenses, and state, local, or foreign income taxes paid. The amount of other federal deductions such as IRA contributions and charitable giving are also limited in California. 

• You cannot increase your California standard deduction for property taxes or taxes on the purchase of a new car or disaster losses as you can on your federal return. But California has a few additional deductions of its own: 

• Interest on loans from utility companies is deductible when the loan is used to purchase and install energy efficient equipment or products
  The amount of your federal mortgage interest credit if you qualified for it on your federal return
  Medical expenses

Additionally there are further adjustments available: https://www.taxslayer.com/support/732/California-Itemized-Deductions?language=1

[petehume]

Per the current CA FTB guidance, property taxes are deductible on your CA state tax return if you itemize and are not subject to the $10k deduction limit that is imposed on the federal return. Local income taxes are not deductible.

https://www.ftb.ca.gov/file/personal/deductions/index.html#Itemized-deductions

https://www.ftb.ca.gov/about-ftb/newsroom/tax-news/march-2019/tax-deduction.html

[Gmills2020]

Turbotax person told me no. 

Plus we did not find where on the state 540 to put property tax..

Federal did not carry it over to ca540

Everything I read says we shouldbe able to deduct on California..

[MayaD]

You deduct you property tax only on your Federal return and it will carry over to the state.

Enter your deductions on your Federal return and CA return will use those itemized deductions if the total amount of itemized deductions exceed the CA standard deduction. 

[mattina]

TurboTax does not let me enter property taxes in the Federal Return even though it says to enter the figures and they will be checked in the CA State return.

[LeonardS]

Be sure to enter all your itemized deductions into your federal return - they will transfer to your California return.  TurboTax will automatically use the larger of the California itemized deductions - which are different from federal - or the California standard deduction.

See Part II of California Schedule CA. The amount on line 30 is the larger of the two.

To enter your property taxes in TurboTax, follow these steps.

• With TurboTax open select the Deductions & Credits tab
• Scroll down to Property (real estate) taxes
• Select add/edit
• Enter your property tax

[Ratfink48]

This item is difficult to determine, and appears to be weakly supported in TurboTax.  California FTB Publication 1001, page 17 does NOT indicate that you cannot adjust for the actual taxes paid if you were limited to the $10,000.00 state property tax limitation.  The following text is the FTB 1001 instructions for other taxes, inclusive of property taxes:

3) Other taxes:
Federal law allows a deduction for state and local income taxes or state and local general sales taxes. California specifically disallows the deduction for state and local income tax (including limited partnership tax and income or franchise tax paid by corporations) and State Disability Insurance (SDI) or state and
local general sales tax.
Differences between Federal and California Law: The TCJA limited the deduction for state and local taxes to $10,000 ($5,000 if married filing separately) for the aggregate of state and local income taxes and property taxes.  California does not conform.
What to do for California: Enter the amount deducted for federal on Schedule CA (540), Part II or Schedule CA (540NR), Part III, line 5a, column B.

NOTE: I had to open worksheet "Tax and Int Wks" in the Federal tax section and fill in the amount paid for my primary property and the amount paid for my second home.  This was then automatically carried over to the California calculations.

[JeffreyR77]

As @ThomasM125 stated, California does not conform to the Federal law limiting the deduction for property taxes to $10,000.

On the CA 540, enter the difference between the deduction claimed on your Federal Schedule A and the total amount paid in property tax for the year in Part II, Line 5e, col C. 

CA 540 Individual Tax Return Instructions (see Part II Adjustments to Federal Itemized Deductions Li... 

[wallisx6]

My only entries for property taxes are below 5,000 .  When I cycle that information into TurboTax it does not lower my tax bill.  Is Turbo Tax broken?

[MayaD]

If you are not itemizing your deductions, you won't see a difference in the refund amount when you report the property tax. 

Even if you itemize, the SALT deduction, which includes property tax, is now capped at $10,000 ($5,000 for couples filing separately).

[Bend371]

For tax planning purposes (as well as reviewing my 2022 tax return completed with Turbo Tax), I have been reading the posts relating to property taxes being deductible in CA. I understand the 10,000 SALT cap (for federal) but there are conflicting posts relating to how property taxes deducted on CA return (when itemizing). On my 2022 return, it seems that Turbo Tax simply used the capped figure of 10,000 but I'm not sure this is correct. Can someone who understands this issue in CA please 1) describe the rule as to deducting property tax in CA, and 2) where to look in  my CA tax return to see if the amount was properly deducted? Thanks.

[DoninGA]

@Bend371 

As of 2021, California property owners may deduct up to $10,000 of their property taxes from their federal income tax if they are filing as single or married filing jointly. Unfortunately, any property taxes you have paid in excess of $10,000 cannot be counted toward your deduction.

See - https://www.newpointlaw.com/post/are-property-taxes-deductible-from-federal-income-tax-in-california....

[DoninGA]

@Bend371 On a California state income tax return -

California conforms, under the PITL, relating to the deductibility of taxes and other provisions related to the deductibility of taxes under IRC section 164, as of the “specified date” of 1/1/2015, with modifications. Specifically, California does not allow a deduction for state or local income taxes. California does not conform to the limited deduction applicable to individuals for state and local real and personal property taxes and state, local, and foreign income, war profits, and excess profits taxes for taxable years beginning after 12/31/2017, and before 1/1/2027.

California FTB website - https://www.ftb.ca.gov/about-ftb/data-reports-plans/Summary-of-Federal-Income-Tax-Changes/index.html

[Bend371]

Thank you - it seems you are both saying something different? Hence the confusion on this issue. Is there anyone who can explain it clearly and correctly? Thanks so much.