S-corp State Franchise/Income Tax Deduction

[S-Corp]

In the "Enter Tax, License and Fee Expenses" page under "Deductions" sub tab and "Federal Taxes" main tab in  Turbotax Business Desktop software, I see "State Income Taxes". I paid $8000 last year to CA state as Franchise Tax Installment though the 2022 Franchise Tax calculated for my business using Turbotax Business State Taxes add-on now is only $2000. Can I enter $2000 as deduction for Federal Taxes before filing the return or I should claim that amount as State Income Tax deduction for the 2023 tax year, if that is allowed.

[S-Corp]

Can any expert in this area help?

[Mike9241 · Accepted solution]

for an S-Corp using the cash basis of accounting, the state franchise/income tax deduction on the federal S-Corp return is in the year paid. if the S-Corp uses the accrual method then the deduction is the actual state income/franchise tax liability for that year regardless of when paid.