Why does California form CA records a $4K loss from the federal return as $4K income even though taxpayer received no W2 and no 1099, state or fed?

Forum|Forum|3 years ago
March 2, 2023
1 reply
16 views

deciding factor seems to be, did taxpayer receive a W2 for same income. TP did not; TP reporting income with no W2 nor 1099.

ProConnect Tax

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George4Tacks

Level 15

Probably an input error. What line of the CA is this on?

Answers are easy. Questions are hard!

A

artandanimalAuthor

Level 2

Thanks for getting back to me.

Part 1, sec b, line 3, business income (possibly column A and B, though my case, column A only)

I spoke with a Franchise Tax Board agent today; we discussed the FTB employee or independent contractor information regarding form California 540 CA. The critical item for moving income to line 3, as noted above, seems to be the taxpayer received a W2, and a 1099 or no 1099 for the same income.

My taxpayer received no W2 and no 1099; since there is no W2, ProConnect Tax should not have triggered moving the income to form CA. (The income was actually a schedule C loss of about $4.6K)

By the way, I did find a work around, but want to be sure I'm not subverting actual CA law!

Robert T

George4Tacks

Level 15

Is this your only CA return?

Section B, 3 Business Income or (Loss) - The first column is just repeating the same information that is on the 1040. Columns B & C are for adjustments due to changes in CA law.

It has absolutely nothing to do with W-2 or (for ProConnect 1099)

" (The income was actually a schedule C loss of about $4.6K)" means line 3 should have (4,600) on it.

Answers are easy. Questions are hard!

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