California unemployment compensation adjustment relate to American Rescue Plan $10,200 deduction

Forum|Forum|5 years ago
March 20, 2021
20 replies
51 views

After the software update, the federal AGI includes the $10,200 deduction of the unemployment compensation. However, the California state return Schedule CA still subtract the full amount of the UI. Should not this subtraction exclude the $10,200 deduction at Federal return? Otherwise there will be double deduction of this $10,200. Should we manually change this amount? Please advise. Thank you.

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R

robgarc

Level 2

Good evening California unemployment is not taxable income, so the 10,200 deduction would only be applied to federal returns. For the state of California only

G

GC48_2Author

Level 3

Thanks for reply. That is correct that the UI is not taxable at California. The schedule CA already deduct the full amount of the UI. However, when CA calculating CA AGI, it use Fed AGI and subtract California adjustments. The California adjustment will includes full amount of UI which Fed AGI already deduct $10,200. There will be double deduction when you let the software calculate.

Just-Lisa-Now-

Intuit Community Champion

Ive been adding back the UI exclusion on the 540 Sch CA, Line 8F

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

N

NU32_2

Level 3

I've been doing the same. CA Line 8F "UCE adjustment" with an addback.

I had already been following IRS instructions on how to report UCE, so with the software upgrade, I've had to go back to all my UC clients and remove my edits on the Federal so as not to double deduct the UCE on there.

It's been an interesting season to the say the least, but the UCE has been a great help to several clients who otherwise would have had some major surprises!

Just-Lisa-Now-

Intuit Community Champion

I wonder if I lock all my previously filed returns before updating, it that will stop the program from changing them....I havent updated at the office yet, I think I'll try it, save me some hassles down the road, Im not digging them all out and fixing them right now.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

K

kitty2

Level 3

Unemployment is not taxable in CA. The full amount will be removed from the CA return.

Just-Lisa-Now-

Intuit Community Champion

I think theyre saying that the CAEITC uses the Fed AGI, which has now been reduced by the UCE...and whether thats correct or not.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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