California Schedule CA Incorrectly Assumes $40k SALT Deduction

[saltandsun]

My SALT deduction is limited to $10k on my Federal return (due to MAGI), but when filling out my CA return TurboTax incorrectly claims my Federal SALT deduction is $40k. This occurs in Column A of line 5e on Schedule CA. The instructions for the form (https://www.ftb.ca.gov/forms/2025/2025-540-ca-instructions.html) say:

The federal deduction for state and local tax is limited to $40,000 ($20,000 for married filing separately) for the aggregate of state and local income taxes and property taxes. California does not conform. If your deduction was limited under federal law, enter an adjustment on line 5e, column C for the amount over the federal limit.

While the text does mention $40k, the intent is pretty clear. I believe I should actually put $10k in Column A of line 5e, but I cannot change the value in TurboTax (even in forms mode). What should I do?

[MonikaK1]

You don't need to make any entries in California Schedule CA directly.

California does not conform to the same limitations as the Federal return regarding state and local tax deductions. California also doesn't allow you to deduct California income taxes paid.

As you saw in the instructions for California Schedule CA, if your deduction was limited under federal law, "enter an adjustment on line 5e, column C for the amount over the federal limit". TurboTax makes any adjustments to the Federal deduction for you based on the data in the Federal return and your answers to the California questions. 

[hpnhxxwn]

I also found this but I do not understand what you reply. In Federal we only had 10k SALT deduction, then in California when calculating deduction we should use 10k instead of 40k, no?

By adjustment, I wonder how did you do it? Thanks

[MonikaK1]

In general, California R&TC does not conform to all of the changes under the TCJA. California does not follow the limitation on the deduction (although it also won't include California income taxes paid in the calculation).

The federal deduction for state and local tax is limited to $40,000 ($20,000 for married filing separately) for the aggregate of state and local income taxes and property taxes. It also further limits the deduction for taxpayers with higher incomes. California does not conform (to the Federal limitation on the deduction). 

If your deduction was limited under federal law, enter an adjustment in the California interview for the amount over the federal limit if the program did not already make the adjustment. California will also subtract the California income tax paid from the Federal deduction for taxes. This item appears on Part II of Schedule CA, Adjustments to Federal Itemized Deductions.

I suggest reviewing Schedule CA before filing to ensure that the correct adjustments were made.

See the instructions for California Schedule CA for more information.

@hpnhxxwn