I found this thread researching the same issue. I have 2 clients, both with 2 x W2s, and they both have excess SDI. I entered the 2 x W2s and coded them properly taxpayer / spouse and can clearly see when I go to Preview Return > Worksheets that the amounts in the SDI column exceed 1229 for both taxpayer and spouse. Nothing is flowing through to the CA 540 return line 74. When I override, I receive a diagnostic that I have to paper file.

I cannot imagine that this is correct because it is a simple calculation that is very common. PTO support was not very helpful - I was told if I thought the program should do something different I should post it in the "idea exchange". Looking at this thread, the program is not behaving the way it should. Is anyone else having this issue?