My taxable income for CA state seems incorrect in TurboTax

Forum|Forum|2 years ago
February 26, 2024
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I moved from CA to WA last year and I am a part-year resident in CA. I got two W2s - one for CA and one for WA. My CA taxable income seems incorrect in TurboTax. Here is my understanding of calculation. Can you please check?

In my CA W2

Box1(wages, tips,..) 42,443

Box12. 740 with code W (HSA)

Box 16(State wages, tips, etc.) 43,183 (this is the sum of the two above)

I have no deductions and no adjustments.

First question: Is 43,183 my CA AGI?

CA standard deduction for the whole year resident is 5,363.

My standard deduction will be a portion of it which from the following calculations.

43,183 (the CA income) / (My federal AGI + box12 with code W from both WA and CA) = 0.2715

Box 12 with code W means HSA contribution and it is not taxable for federal but it is for CA so the whole amount (HSA from WA and CA) is added here.

0.2715 * 5,363 (CA standard deduction) = 1,456

So my CA taxable income would be 43,183 - 1,456 = 41,727

But TurboTax shows it is 40,984.

I don't know how this number comes out.

It is good that my taxable income is lower, but I want to know why.

Thank you!

BillM223

1. "First question: Is 43,183 my CA AGI?" - No, the CA AGI is line 17 on the form 540. the 43,183 is line 12. Note that California does not allow the deduction of HSA contributions.

BTW, it does not matter what is in box 16 on your W-2, because TurboTax will derive the CA taxable income from the federal income plus/minus adjustments like the HSA contributions.

NOTENOTE: line 12 is not used anywhere else on the CA 540 return (look and see), so it really doesn't matter what is in box 16 on your W-2.

2. For point #2, the "43,183" is not the CA AGI (as I noted above), but is likely line 12. I am guessing that the CA AGI is $42,440, which makes the simple equation come out right.

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