NOL and CALIFORNIA RETURN

[HOPE2]

Hi to all and hope you have had an awesome tax season.
Client had 2019 NOL from sch C business and for 2021 wanted to use this NOL. I entered the amount on Federal carryover worksheet as positive number and the negative number flowed to Sch 1, so far so good. But in California CA 540 I see NOL number as positive in 8a which it is negative in Sch 1 in line 8a so that it caused number in line 27 in CA 540 column A become more than line 11 in 1040 Federal page 1. However, Column B in CA 540 has numbers because of EDD and nontaxable grant and column C has a number which came from section B-Additional income line 3. FTB said you should file amended and correct line 27 in CA 540. Should I file 3805V? Client received refund less than what has expected.
I really need a help.

[Just-Lisa-Now-]

I cant really follow your "this line is more than that line" NOL scenario and Im not following what it was that CA changed the refund for.....have you gotten the explanation letter from CA yet?

[HOPE2]

Thanks and yes Lisa, Client got a letter just mentioned that they adjusted his refund. I called them and FTB said since line 27 column A in CA 540 is not same as line 11 in 1040. But for me it is important why the line 8a in CA 540 has a positive number while line 8a in Sch 1 has a negative number and how to fix it or what should I do in CA return when we have a NOL carryforward from 2019 or other past years, should I fill out 3805V whenever we have a NOL in Federal part? However, I did it but I can not see any changes in CA540.

[HOPE2]

Hi again. If it is possible just help me to understand that why I am seeing a positive number of NOL in CA540 line 8a while there is a exact number as negative in Sch 1 line 8a in Federal return which came from FEDERAL CARRYOVER worksheet lines 14a and 14b?

[abctax55]

(caveat- I don't use PS)

What is on F 540, Sch CA - line 9 b-2?

Federal and CA NOL's are often different.  Sch CA - Line 8 adds back the Federal NOL - THAT's why the numbers are identical.  Sch CA - line 9-b2 deducts the appropriate CA amount.

Is your client's income > $ 1M?

[abctax55]

Wait... I just re-read the original post.

" 2019 NOL - want to use in 2021"  

What happened in 2020?

[HOPE2]

Thanks for your help, in 2020 client had a loss as well and could not use it to reduce income. Now, he want to use 2019 NOL for 2021. I did not file his return for 2020.

Client income < $1M.

And when I filled out 3805V, the NOL amount did not populate in Sch CA - line 9-b2; so I entered the NOL number in CALIFORNIA CARRYOVER WORKSHEET line 13 and I had finally NOL amount in Sch CA - line 9-b2. Am I right? If not, please correct me.

I really appreciate it.

[HOPE2]

Hi, May I have your idea please.