Moved from California to Colorado for new job - Turbo Tax thinks I can deduct moving expenses on California taxes?

[variant]

I moved from California to Colorado in August 2024 for a new job.  I added information about my moving expenses to my federal return, but of course there's no longer any deduction for it.  But that information was pulled into my state return.

As a result, my California state return includes Form 3913, and the amounts there are included in CA 590NR and are reducing the amounts in Schedule C line 27, column D by the amount of the moving expenses.

TurboTax does present me with the following choice in the California state return:

• I moved INTO California, or WITHIN California, in connection with my new job.

• I moved OUT of California, or I moved AFTER moving out of California, in connection with my new job

• I moved wholly OUTSIDE of California

The last two would both seem to apply to me, but the deduction remains present regardless of whether I choose the middle or last option, though the last one indicates I'm ineligible for the deduction but still seems to give it to me.

It seems weird to me that California would give me a deduction for leaving the state.  Have I encountered a bug?  I used the "ask an expert" function and was told that if the program says I get the deduction, I do.  It just doesn't feel right.

[variant]

After reading the 540nr instructions, I'm increasingly thinking that I am allowed to deduct moving expenses for leaving California, as long as it's in connection with my new job (vs. simply leaving the state).

[MaryK4 · Accepted solution]

You are able to deduct moving expenses on your California if you moved for your new job.  If you meet the distance and time test, it can be used to reduce your California taxable income.