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

Example: Susan moved into California on December 1. She made

FULL-YEAR NONRESIDENT:

contributions to her IRA and claimed a deduction of $2,000 on her federal

Multiply the federal deduction (line 31a, column A) by the California ratio (see

return. Her California wages were $500. Her allowable deduction is the lesser

above) and enter the amount in column E, line 31a.

of:

PART-YEAR RESIDENT:

• The federal deduction of $2,000.

Multiply the alimony paid while a nonresident by the California ratio (see

• The California compensation of $500.

above) to determine the nonresident portion. Add this amount to the alimony

paid while a resident. Enter the total in column E, line 31a.

Therefore, she enters $500 on line 28, column E. She will make no entry in

column B or column C.

Line 36

Add line 23 through line 35 in column E. Enter the result on this line.

Keogh, SEP, and Simple deductions are limited to a percentage of the federal

deduction.

Line 37 – Total

Self-employment income

Subtract line 36 from line 22b in column E. This is your California adjusted

reported in column E

gross income (AGI). Enter the result on this line. Also enter this amount on

___________________

= California ratio

line 45.

Total self-employment

Also, transfer the amount from:

income reported

• Line 37, column B to Long Form 540NR, Side 1, line 14.

in column D

If column B is a negative number, transfer the amount as a positive

Multiply federal deductions by the California ratio described above and enter

number to line 16.

the result on line 28, column E.

• Line 37, column C to Long Form 540NR, Side 1, line 16.

Get FTB Pub. 1005 for more information.

If column C is a negative number, transfer the amount as a positive

number to line 14.

Line 26 – Moving Expenses

• Line 37, column E to Long Form 540NR, Side 1, line 21.

California law and federal law are the same for moving expenses. If you

If you plan to itemize deductions, go to Part III.

moved:

• Into California in connection with your new job, enter the amount from

Specific Line Instructions for

column A, line 26, in column E, line 26.

Part III Adjustments to

• Out of California in connection with your new job, enter -0- on line 26.

Federal Itemized Deductions

Exception: If you moved out of California in connection with your new job and

received compensation from that job attributable to a California source, your

Line 38 – Federal Itemized Deductions

moving expense adjustment will be limited by the ratio of California source

compensation from the new job to total compensation from the new job.

Enter the total amount of itemized deductions from your federal Schedule A

(Form 1040), lines 4, 9, 15, 19, 20, 27, and 28 or Schedule A (Form 1040NR),

Line 27 – One-half of Self-Employment Tax

lines 3, 7, 8, 15, and 16.

If you claimed a deduction in column A for self-employment tax paid, your

Nonresident military servicemembers domiciled outside of California exclude

California deduction is limited to a percentage of the federal deduction. That

military pay from federal AGI when calculating threshold limits for the

percentage is the ratio of:

following federal Schedule A, Itemized Deductions, items: medical and dental

Self-employment

expenses, gifts to charity, casualty and theft losses, and job expenses and

income reported

most other miscellaneous deductions. Recalculate these amounts using the

in column A

modified federal AGI amount. Subtract military pay from federal AGI, and

from all sources

from CA sources

then recalculate itemized deductions using the new threshold limits. Enter the

while a CA resident

while a nonresident

_____________________________________

recalculated Schedule A, total itemized deductions on Schedule CA (540NR),

line 38.

Total self-employment income

reported in column A

Important: If you did not itemize deductions on your federal tax return but will

itemize deductions on your California return, first complete federal Schedule

Multiply your federal deduction by the California ratio described above and

A. Then complete Schedule CA (540NR), Part III, line 38 through line 44.

enter the result on line 27, column E.

Attach a copy of federal Schedule A to your Long Form 540NR.

Line 29 – Self-Employed Health Insurance Deduction

Line 39 – State, Local, and Foreign Income Taxes; General Sales Tax

If you claimed a deduction in column A for payments you made to a health

Add the following amounts from federal Schedule A (Form 1040) and enter

insurance plan while you were self-employed, your California deduction is

on line 39:

limited to a percentage of the federal deduction. That percentage is the ratio

• Line 5, state and local income tax (including limited partnership tax and

of:

income or franchise tax paid by corporations), State Disability Insurance

Total self-employment income

(SDI), and Voluntary Plan Disability Insurance (VPDI).

reported in column E

• Line 8, foreign income taxes.

__________________________

= California ratio

Total self-employment income

If you are deducting either local general sales and use taxes or state and local

reported in column D

income taxes as an itemized deduction on federal Schedule A, line 5, enter the

amount on Schedule CA (540NR), line 39.

Multiply your federal deduction on line 29, by the California ratio described

For tax years beginning in 2004 and 2005, the American Jobs Creation Act

above and enter the result on line 29, column E.

of 2004 allows taxpayers to elect to claim either local general sales and use

Line 30 – Penalty on Early Withdrawal of Savings

taxes or state and local income taxes as an itemized deduction. If you are

Enter the interest penalties charged while a California resident.

deducting either of these on line 5 of federal Schedule A, enter the amount on

Line 3a – Alimony Paid

line 39.

If you claimed a deduction in column A for alimony payments, first compute

Line – Other Adjustments

your California ratio:

Adoption-related Expenses – If you deducted adoption-related expenses on

California AGI (line 37, column E)

your federal Schedule A and are claiming the adoption cost credit on your

(without the alimony deduction)

= California ratio

Long Form 540NR, enter the amount of the adoption cost credit claimed as a

Total AGI (line 37, column D)

negative number on line 41.

(without the alimony deduction)

Mortgage Interest Credit – If you reduced your federal mortgage interest

deduction by the amount of your mortgage interest credit (from federal

Form 8396, Mortgage Interest Credit), increase your California itemized

Page 8 Schedule CA (540NR) Instructions 2007 (REV 01-08)

Instructions For Schedule Ca (540nr) - California Adjustments - Nonresidents Or Part-Year Residents - 2007 Page 8

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