Unemployment benefit Exclusion
Tax payer has W2 Income $10,000 and Unemployment benefit (form 1099-G) for $14800. Unemployment benefit is not taxable to CA State. On Federal tax return, On Schedule I, Unemployment benefit $10,200 is excluded and only $4600 is includable in federal income. Tax payer AGI on Line 11 (form 1040) is $14,600 (W2 income $10,000+ Unemployment taxable income $4600)
From line 11, Federal AGI is carried over to Line # 13 of CA form 540 = $14,600. On line 14 of form 540 how much be California adjustment (subtractions) for unemployment?????????
It should be again full unemployment amount $14,800 adjustment and CA AGI will be -$200 (negative)
Or
Only taxable portion $4600 of unemployment in Federal AGI will be excludable and CA AGI should be $10000 (W2 income)???????????
