Question

Which part of the payroll tax is deductible for California return?

Forum|Forum|3 years ago
April 17, 2023
1 reply
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I am using Turbotax Business, working on C-corporation return for the state of California.

According to the explanation, "Unlike federal law, California does not allow a deduction for California franchise or income tax, or for any other tax based exclusively on, or measured by, income."(pics attached)

These are the breakdown of the $2243 payroll tax (employer portion of the payroll tax paid):

Social Security: 1568.6

Medicare: $366.85

FUTA: $63

CA SUI: $238

CA ETT: $7

Which part of these are non-deductible, and what do I enter as "Taxing Authority"?

TurboTax Business Windows

D

DianeW777

All employer payroll taxes are deductible, including all state income tax withheld for their employees. There is none that are not deductible when it comes to payroll taxes. I would caution not to include here any taxes withheld and paid on behalf of your employees that is already included in gross wages expense.

What they are explaining is that state income tax is not deductible that was paid by the business on their net profit. No California franchise or state income tax the business had to pay on it's own net income can be deducted by the business.

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