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Screen CAAdj - California Adjustments to Income (1040)

Overview

Use this screen to complete Schedule CA (540), California Adjustments (Resident), or Schedule CA (540NR), California Adjustments (Nonresident or Part-Year Resident). If information transferred from UltraTax/1040 does not require additional data or coding, UltraTax/1040-CA shows it on the form only, not in the input screen.
Interest and dividend income is entered in the federal B&D, K1, and K1T Screens. These screens may be accessed by using the links provided in the CAAdj Screen. Interest and dividend data entered in the statement dialogs in these federal screens is used in the calculation of state income and adjustments. In those interest and dividend statements, you may indicate if data should be applied only to the federal or only to the state return. In addition use of the state postal code and
In-State Source %
 indicates which state should react to the data entered in the federal statements.
  • Enter
    F
     in the
    F/S
     field to indicate that the item is for the federal return only.
  • Enter
    S
     in the
    F/S
     field and a non-CA postal code in the
    State
     field to indicate that the item transfers only to the state specified and is ignored for federal purposes.
  • For California source interest and dividends reportable on part-year and nonresident California returns, you must enter
    CA
     in the
    State
     field in these federal statements. Further, for interest and dividends reportable as California source for nonresident California returns, you must also enter a percentage in the
    In-State Source %
     field.

Differences for California Law

Enter income adjustments for California in this section. UltraTax CS uses this information to complete Schedule CA (540), Part I, section A or Schedule CA (540NR), Part II, section A.
UltraTax CS automatically calculates California adjustments from information entered at the federal level with respect to items such as taxable interest, dividend income, state income tax refund, unemployment compensation, Social Security benefits and California lottery winnings.
Schedule CA(540) and Schedule CA(540NR) automatically calculate subtractions and additions to total source wages under certain circumstances. Use this field to force the subtraction and/or addition reported on Schedule CA(540/540NR).
Mark this field if there is a wage adjustment that includes a subtraction for military wages earned by a spouse living in a community property state. This field applies only to resident returns when the filing status is married filing separately. When this field is marked, MPA is printed on Schedule CA (540) and is included in the electronic file.
The amount of excess moving expense reimbursement included in California source wages on Schedule CA (540NR) defaults to the federal amount when a
CA
 postal code is entered on the federal W-2 Screen, Box 12, Code
P
 for the related reimbursement. Use this field to force the Amount to include as California source wages on Schedule CA (540NR).
UltraTax CS automatically calculates additions and subtractions to federal interest and dividends from data entered in the federal B&D, K-1, and K1T Screens. Amounts entered in this field transfer to Schedule CA (540) or Schedule CA (540NR), Column B and/or C, in lieu of the calculated amounts.
UltraTax CS automatically calculates California source interest and dividend income from data entered in the federal B&D, K-1, and K1T screens with a postal code of
CA
 and an in state percentage. Amounts entered in this field transfer to Schedule CA (540NR), Column E, in lieu of the calculated amounts.
UltraTax CS automatically calculates federal Form 8606 using California amounts from data entry in the CA1099R, CA1099R2, and CAIRA screens. Use these fields to force an amount different from the calculated amount.
Part-year and nonresident returns default to
0
 (zero) for taxable IRA distributions.
Amounts entered in the
Subtractions
 and
Additions
 columns transfer to Schedule CA (540) or Schedule CA (540NR), column B and/or C, in lieu of the amounts calculated on the Pension Worksheet. For nonresident returns, UltraTax CS assumes all pension / annuity income is nontaxable. Use the
CA Source Amts
 column to enter a taxable amount.
UltraTax CS automatically calculates California source capital gains or losses included on Schedules D (540) and D (540NR) from data entered in federal Screens B&D, K1, and K1T with postal code
CA
, and from data entered in the CAInc and CACO Screens. Use this field to force an amount different than the calculated amount.
Use this field to force an amount for Schedule CA (540NR) different from the CA Sources version of Schedule D-1.
Use this field to enter net operating loss carryovers allowed in the current year calculated on Form 3805D, 3806, 3807, or 3809. The forms are available in the Non Calculating folder and, when completed, are included in electronically filed returns.
Enter other income adjustments (subtractions and additions) for California law and amounts taxable to California. Information entered in the statement dialogs print on an accompanying statement.
If a subtraction to income requires Form 3504, Enrolled Tribal Member Certification, to be included with the return in order to support the adjustment, mark the
Form 3504
 column. UltraTax CS uses this column to display diagnostic messages and to include certain information in the electronic record.
California treats income from canceled debt on a qualified principal residence as taxable even if it is treated as nontaxable for federal purposes. Thus, when code
10
 is entered in the
Reason Box 2 amount is excluded from gross income
 field on the federal 1099C Screen, the income from the canceled debt is effectively included in California taxable income. UltraTax reports the difference between the taxable income under federal law and the taxable income under California law as an addition on Schedule CA(540) or Schedule CA(540NR). Use these fields to force the amount of addition for canceled debt income to zero or to some other amount.
Schedule CA(540/540NR) reports any difference between
Excluded benefits
 on federal Form 2441, page 2 and
Excluded benefits
 on California Form 3506, page 2 as an addition for Dependent Care Benefits Exclusion for Other Income on Schedule CA(540/540NR). Use this field to force the amount to include as an Addition on Schedule CA(540/540NR).
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