did you make an entry on the Form CA as an income adjustment? Or did you make an income adjustment on the Federal Other Income line that isnt being recognized by CA maybe?

I made the adjustment on the CA return.  The income is taxable to Federal return but not CA State

What was the adjustment? Did it have a specified line for it or did you make a generic entry?

I had to enter it on line 24z-Other adjustments with a description.  This was back pay from legal settlement issued on a W-2 that should have been non-taxable to CA Wages since the client did not earn the wages in CA or was a resident of CA last year.  I checked with the CA Franchise Board and was instructed that it was non-taxable to CA.  Unless there is somewhere else to enter it....???

You said NR, right? Then you should make that adjustment on the Form CA, not on Line 24z.

Put a zero in Column E of the Form CA on the wages line to make it not taxable to CA.

Okay, made adjustments.  Going to try e-file again.  Might respond back tomorrow if it rejects again.  Thanks for your help!

Okay.  Resolved the W-2 income that was non-taxable.  Now having issue with Other income that flowed from the Federal to the CA line 8z.  This 1099 income is also non-taxable to CA.  I entered a zero in Column E and e-filed.  It rejected again with the following:  Schedule CA (540NR), Line 8z (Column E).  If any amounts have been entered zero, please remove and set them to blank.  when I do this, the field goes pink with an error.  I have tried several things and it just keeps rejecting.  Any ideas???    

what is that income? what kind of 1099 do you have entered as Other Income on the federal?

This was a 1099 issued to the client for a whistleblower settlement.  The total settlement was issued to her and I took a deduction for the amount that was paid to the attorney for legal fees.  The balance was taxable to her on the federal but should not be taxable on the State as she was a non-resident and it was not for earnings in CA. 

So it was a 1099MISC you entered on the Federal return? and it landed on the Other Income Statement Line 3b?

Did you use the NR state allocation worksheet at the bottom of the Fed Info worksheet to allocate income to CA and the other states?

CA doesnt seem to like things on that Line 8z