California Schedule R, Apportionment and Allocation of Income

California Schedule R, Apportionment and Allocation of Income, is not included in TurboTax Home and Business. It is available in TurboTax Business for entity returns. See the instructions for the form. 

The California interview in TurboTax asks questions that give the program the information it needs to correctly calculate California income from Schedule C businesses. 

Nonresidents and resident individuals eligible for the other state tax credit who have income or loss from a trade or business activity conducted within and outside California generally must apportion their income in accordance with the provisions of R&TC Sections 25120 through 25141 (see Cal. Code Regs., tit. 18 section 17951-4). 

Items of income or loss that would be treated as nonbusiness income under those sections if earned by a corporation should be sourced using the normal sourcing rules that apply to individuals under R&TC Sections 17951 through 17955, and reported on the appropriate line of Schedule CA (540), California Adjustments – Residents, or Schedule CA (540NR), California Adjustments – Nonresidents or Part-Year Residents. 

Individuals complete only Schedules R-1, R-2, and lines 17, 18a, and 18b on Schedule R. Enter on line 17 the total income from the trade or business after any adjustment for federal and state differences. For more information, see Schedule CA (540). Nonresidents or part-year residents should enter the amount from line 18b on Schedule CA (540NR), Part II, Section B, line 3 or line 5, column E.