Looking for a California Ftb Form 540 Templates? Download it for free!

return showing how the income and expenses were split between you and

Military Pay Adjustment. Compensation for military service of a

your spouse/RDP.

servicemember domiciled outside of California is exempt from California

tax. It is excluded from adjusted gross income from all sources. For more

Line 7 through Line 2

information, get FTB Pub. 1032, Tax Information for Military Personnel.

Enter on line 7 through line 21 the same amounts you entered on federal

Active duty military servicemembers domiciled outside of California, may

Form 1040, line 7 through line 21; Form 1040A, line 7 through line 14b;

claim an adjustment for active duty military pay.

Form 1040EZ, line 1, line 2, and line 3; or Form 1040NR, line 8 through line

21 for the same types of income.

To claim the adjustment, write “MPA” to the left of column A and enter

the amount of your active duty military pay in column B. Exclude this

Line 22a – Total

amount from column E. Attach a copy of your W-2, reflecting your military

Combine the amounts on line 7 through line 21. Enter the total on line 22a.

compensation, to your return.

This number should be the same as the amount on federal Form 1040, line 22;

Form 1040A, line 15; Form 1040EZ, line 4; or Form 1040NR, line 23.

Sick pay received under the Federal Insurance Contributions Act and

Railroad Retirement Act. California excludes these items from income. Enter

Line 22b – Balance Carried Forward

in column B the amount of these benefits included in the amount in column A.

Enter on line 22b the total from Side 1, line 22a, column A.

Ride-sharing fringe benefit differences. Under federal law, qualified

Line 23 through Line 35

transportation benefits are excluded from gross income. Under the California

Enter the same amounts you entered on federal Form 1040, line 23 through

Revenue and Taxation Code, there are no monthly limits for the exclusion

line 35; Form 1040A, line 16 through line 19; or Form 1040NR, line 24

of these benefits and California’s definitions are more expansive. Enter the

through line 33.

amount of ridesharing benefits received and included in federal income on

Line 3a and Line 3b

line 7, column B.

Enter on line 31a the same amount entered on federal Form 1040, line 31a.

Foreign Income. If you excluded income exempted by U.S. tax treaties on

Enter on line 31b the social security number or individual taxpayer

your federal Form 1040 (unless specifically exempt for state purposes), enter

identification number (ITIN) and last name of the person to whom you paid

the excluded amount in column C. If you claimed foreign earned income or

alimony.

housing cost exclusion on your federal Form 1040 (under IRC Section 911),

Line 36

see the instructions for line 21.

Add line 23 through line 35. This amount should be the same as the amount

Exclusion for compensation from exercising a California Qualified Stock

on federal Form 1040, line 36; Form 1040A, line 20; or Form 1040NR, line 34.

Option (CQSO). To claim this exclusion:

However, if you made any of the adjustments described in the instructions for

•

Your earned income is $40,000 or less from the corporation granting the

federal Form 1040, line 36, or if you claimed the foreign housing deduction

CQSO.

from federal Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign

•

The market value of the options granted to you must be $100,000 or less.

Earned Income Exclusion, enter the amount from Form 1040, line 36 on this

•

The total number of shares must be 1,000 or less.

line.

•

The corporation issuing the stock must designate that the stock issued is a

If you used Form 1040NR and reported an amount on Form 1040NR, line 30

California qualified stock option at the time the option is granted.

for excluded scholarship and fellowship grants, enter the amount from

If you included in federal income an amount qualifying for this exclusion,

Form 1040NR, line 34 on this line.

enter that amount in column B.

Line 37 – Total

Exclusion for Medical Expenses Reimbursement. California allows an

Subtract line 36 from line 22b. This amount should be the same as

exclusion from gross income for employer-provided accident, health insurance,

the amount on Long Form 540NR, line 13; federal Form 1040, line 37;

and medical expense reimbursement for registered domestic partners and that

Form 1040A, line 21; Form 1040EZ, line 4; or Form 1040NR, line 35.

partner’s dependents if not previously deducted. Self-employed individuals may

Column B and Column C — Subtractions and

also claim a deduction for health insurance costs paid for themselves, their

spouse or registered domestic partner, and their dependent(s), including the

Additions

dependent(s) of their RDP. Enter this amount in column B.

Use these columns to enter subtractions and additions to federal amounts in

Compensation of merchant seamen, military servicemembers, rail, motor,

column A that are necessary because of the differences between California

and aircraft carriers. Exclude the following from gross income: compensation

and federal law. Enter all amounts on line 7 through line 36 as positive

for the performance of duties of certain merchant seamen, rail carriers, motor

numbers.

carriers, aircraft carriers, and military servicemembers.

Do not deduct income that was earned while a nonresident of California or

Line 8 – Taxable Interest Income

from sources outside of California. There must be a difference in tax law.

If you did not receive any of the kinds of income listed below, make no entry

Generally, if a California resident cannot subtract the income in column B, a

on this line in either column B or column C. Enter in column B, the interest

nonresident or part-year resident may not subtract income from column B.

that you received from:

If you are a nonresident alien, use column B and column C to adjust federal

• U.S. saving bonds (except for interest from series EE U.S. savings bonds

AGI to include income from all sources, even if you were not required to

issued after 1989 that qualified for the Education Savings Bond Program

report it on your federal return. California does not have special rules limiting

exclusion).

total AGI from all sources to U.S. source or effectively connected income of

• U.S. Treasury Bills, notes, and bonds.

nonresident aliens.

• Any other bonds or obligations of the United States and its territories.

• Interest from Ottoman Turkish Empire settlement payments.

You may need one of the following FTB publications to complete column B

• Interest income from children between the ages of 14 and 18. (For more

and column C:

information, get FTB Pub. 1001, Supplemental Guidelines to California

• 1001, Supplemental Guidelines to California Adjustments

Adjustments.)

• 1005, Pension and Annuity Guidelines

• Interest income from children under the age of 14, included on the

• 1031, Guidelines for Determining Resident Status

parent’s or child’s federal return and reported on the California return by

• 1032, Tax Information for Military Personnel

the opposite taxpayer.

• 1100, Taxation of Nonresidents and Individuals Who Change Residency

Certain mutual funds pay “exempt-interest dividends.” If the mutual fund has

To get a publication or form go to our Website at or see

at least 50% of its assets invested in tax-exempt U.S. obligations and/or in

page 58 of your 2007 California 540NR Booklet.

California or its municipal obligations, that amount of dividend is exempt from

Line 7 – Wages, Salaries, Tips, etc.

California tax. The proportion of dividends tax-exempt will be shown on your

Generally, no adjustments are made on this line. If you did not receive any of

annual statement or statement issued with Form 1099-INT.

the following types of income, make no entry on this line in either column B

or column C.

Page 2 Schedule CA (540NR) Instructions 2007 (REV 03-08)

Instructions For Schedule Ca (540nr) - California Adjustments - Nonresidents Or Part-Year Residents - 2007 Page 2

Related Articles

Related forms

Related Categories