2016-17-18-19 CA 540NR Sch S

[huntgal]

client who is non resident of CA, Resident of AZ. On Schedule CA I entered only CA income from wages. Sch S was sent the full amount of income to calculate the tax credit, so credit was overtaken.

The line on Sch S line 8 should only be the CA income.

Has anyone else had this? My client now has 4 years to payback to CA!

This is definitely a PS error and should be corrected for 2020!

[Just-Lisa-Now-]

Ive always used the non resident state allocation at the bottom of the federal information worksheet to allocate income, and the software does the rest automatically, I've never entered anything directly on Sch CA.  It all looks like I would expect (correct) on my screen.

[BobKamman]

Software is a wonderful tool but the person signing the return should still rely on the smell test. Without numbers we don’t know what happened here, but we do know that California tax rates are generally higher than Arizona tax rates, and that unlike most states, California gives Arizona residents a credit for taxes paid on nonresident income.

So, let’s say a Zonie makes $10,000 in California and it’s taxed at a 5% rate. The same income is taxed at 2% by Arizona. You would expect California tax before credit to be $500; the Arizona credit to be $200; and the balance owed to California to be $300.

If that’s not the answer that the software comes up with, then figure out why it doesn’t smell right.

[huntgal]

Hi Lisa, yes I also use the NR allocation worksheet on the federal forms menu. In 2016-2017-2018 the program brought forward to the CA 540NR form CA the wrong number using the total federal AGI, then bringing that to the CA sch S, which calculated the wrong credit.

In 2019 this did not happen, the CA sch S was correct.

since my client was notified, this tech error cost me over $500 in interest as I always pay this if it is my business error, certainly not their fault. I am curious if anyone else caught this.

I wanted to report this to PS tech and see if they found this error out and corrected the software in 2019.

Can you guide me in how to ask this of PS tech?

Thank you,

Ronda

[Just-Lisa-Now-]

You'd have to call in to speak with tech support to have this researched.   

I havent seen any other similar complaints and my 2018 AZ resident/CA non resident returns appear correct for me....they have CA rental income though, not wages...I dont have any to double check for wages carrying over incorrectly.

Im sure the first thing you checked was that you've got the correct state wages reported on the W2?

[leisacpa2011]

I am in the same boat, just received a letter from CA for 540NR for 16-17-18.  Based on the letter, it appears Proseries has been calculating the credit incorrectly.  I get that we are the accountants but, we pay a lot of $$$ for software that we must assume to a certain extent is calculating correctly.  It is not possible for a practitioner to know all 50 state income tax returns.  

Once I get the POA in with California, I will call California to discuss.  Then, escalate with Proseries.  My client has $5000 of interest due so there is a lot on the line.  

Question is if California has realized Proseries (Intuit) has made this error, then many Proseries returns will be looked at more.  

-leisa

[huntgal]

Thank you so much for the info, I thought I was the only one out there with this situation. I reviewed my entries for those years and was absolutely sure I did the correct entry. The 2019 CA Sch S was calculated ok which confused me.

Please keep me informed. I really appreciate it. Best of luck!