Turbo Tax Home/Bus wrong about California qualifying child - still

[chamberlainke]

Same as my question last year! I have Home and Business version. It is prompting me for my child's gross income on California State taxes. It says it needs it for qualifying child. However, the FTB says qualifying child tests as shown below - there is no gross income requirement! How do I skip this question, Turbo Tax????

Qualifying Child

A qualifying child is a person who meets all of the following tests:

1. Relationship Test. The person must be one of the relatives listed as follows or a descendant of such a person:
Birth child
Stepchild
Eligible foster child
Adopted child
Grandchild
Brother
Sister
Half brother
Half sister
Stepbrother
Stepsister
Nephew
Niece

2. Age Test. The person must be under 19 years of age or a full-time student under 24 years of age. The person also meets the age test if he or she is permanently and totally disabled at any time during the calendar year. (If the person does not meet the age test to be a qualifying child, he or she may meet the requirements to be a qualifying relative.)

3. Residency Test. The person must live with you for more than half the year.

4. Support Test. The person must not have provided more than half of his or her own support.

If your qualifying child was married or an RDP, you must be entitled to a Dependent Exemption Credit for your qualifying child in order to qualify for head of household filing status. Therefore, the qualifying child must also meet the two additional tests for dependency (joint return test and citizenship test). (Refer to Dependent Exemption Credit in this publication for more information.)

If you are considered unmarried or considered not in a registered domestic partnership, you must be entitled to a Dependent Exemption Credit for your child, regardless of your child’s marital status. (Refer to Considered Unmarried or Considered Not in a Registered Domestic Partnership.)

Special Test for Qualifying Child of More Than One Person. If two or more taxpayers including a parent claim the same child as a qualifying child for a particular tax year, the person is treated as the qualifying child of the taxpayer who is either:
- A parent of the person.
- If none of the taxpayers is a parent, the taxpayer with the highest adjusted gross income for the taxable year.

If the parents both claim the same child, their child will be the qualifying child of either:
- The parent with whom the child resided for the greater portion of the taxable year.
- The parent with the highest adjusted gross income, if the child resides with both parents for the same amount of time during the taxable year.

[SusanY1]

For California returns, taxpayers filing with the Head of Household status do have to meet the income test requirements for certain dependents.  The rules noted in your question are the federal rules, and California does not conform to these in all cases. 

If you are not filing as Head of Household, please let us know in which section of the program you are seeing this question so we can investigate further.  

[chamberlainke]

Thank you. The excerpt below is from publication 1540 from the Franchise Tax Board, not federal. This publication states that: "To qualify for the HOH filing status, you must have a qualifying person who is related to you and meets the requirements of either a qualifying child or qualifying relative." So, child OR relative - they are two different things. The only references to Gross Income in this publication refer to a "relative" or the child's parents when both are involved. Regardless of that though, the gross income only needs to be less than $4,200. It isn't looked at for your children who are full time students. So at best Turbo Tax should not even prompt for this information (don't collect it if you don't need it) unless qualifying relative or dual custody apply, and then the only necessary question is if the income is less than the threshold - no need to collect the gross amount. This is what I am reading: https://www.ftb.ca.gov/forms/2019/2019-1540.html#QualifyingChild

[SusanY1]

The tax program correctly asks for this information because the information is required by the state of California. 

Whether the person qualifies or not based on the income, the answer to the income question is required on Form 3532, which must accompany California returns with Head of Household status.

TurboTax will also ask other appropriate questions such as whether or not a child is a full-time student for this form as well - but the income question is asked because California requires the number to be transferred to the form.  

See also the Head of Household Status Filing Schedule,  California Form 3532.