Instructions For Schedule Ca (540) - California Adjustments - Residents - 2013

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Instructions for Schedule CA (540)
References to these instructions are to the Internal Revenue Code (IRC) as of January 1, 2009, and the California Revenue and Taxation Code (R&TC).
General Information
Line 23 through Line 30 and Line 32 through Line 35
Enter the same amounts entered on your federal Form 1040, line 23 through
In general, for taxable years beginning on or after January 1, 2010, California
line 30 and line 32 through line 35 or Form 1040A, line 16 through line 19.
law conforms to the Internal Revenue Code (IRC) as of January 1, 2009.
Line 31a and Line 31b
However, there are continuing differences between California and federal law.
Enter on line 31a the same amount entered on your federal Form 1040,
When California conforms to federal tax law changes, we do not always adopt
line 31a. Enter on line 31b the social security number (SSN) or individual
all of the changes made at the federal level. For more information, go to
taxpayer identification number (ITIN) and last name of the person to whom
ftb.ca.gov and search for conformity. Additional information can be found in
you paid alimony.
FTB Pub. 1001, Supplemental Guidelines to California Adjustments, and the
Business Entity tax booklets.
Line 36
The instructions provided with California tax forms are a summary of
Add line 23 through line 31a and line 32 through line 35. However, if you made
California tax law and are only intended to aid taxpayers in preparing their
any of the adjustments described in the instructions for federal Form 1040,
state income tax returns. We include information that is most useful to the
line 36 or if you claimed the foreign housing deduction from federal Form 2555,
greatest number of taxpayers in the limited space available. It is not possible
Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion,
to include all requirements of the California Revenue and Taxation Code
enter the amount from Form 1040, line 36 on this line.
(R&TC) in the tax booklets. Taxpayers should not consider the tax booklets
Line 37 – Total
as authoritative law.
Subtract line 36 from line 22.
Conformity
Column B and Column C — Subtractions and Additions
For updates regarding federal acts, go to ftb.ca.gov and search for conformity.
Use these columns to enter subtractions and additions to the federal amounts
Registered Domestic Partners (RDP) – RDPs will compute their limitations
in column A that are necessary because of differences between California and
based on the combined federal adjusted gross income (AGI) of each spouse’s
federal law. Enter all amounts as positive numbers unless instructed otherwise.
or partner’s individual tax return filed with the Internal Revenue Service (IRS).
You may need one or more of the following FTB publications to complete
For column A, line 7 through line 21, and line 23 through line 35, combine
column B and column C:
your federal amounts from each spouse’s or partner’s individual federal tax
• 1001, Supplemental Guidelines to California Adjustments
return. For more information on RDPs, get FTB Pub. 737, Tax Information for
• 1005, Pension and Annuity Guidelines
Registered Domestic Partners.
• 1031, Guidelines for Determining Resident Status
The combined federal AGI used to compute limitations is different from the
• 1032, Tax Information for Military Personnel
recalculated federal AGI used on Form 540, California Resident Income Tax
• 1100, Taxation of Nonresidents and Individuals Who Change Residency
Return, line 13. In situations where RDPs have no RDP adjustments, these
To get forms and publications, go to ftb.ca.gov.
amounts may be the same.
Line 7 – Wages, Salaries, Tips, etc.
Military Personnel – Servicemembers domiciled outside of California,
Generally, you will not make any adjustments on this line. If you did not
and their spouses/RDPs, may exclude the servicemember’s military
receive any of the following types of income, make no entry on this line in
compensation from gross income when computing the tax rate on
either column B or column C.
nonmilitary income. Requirements for military servicemembers domiciled in
Active duty military pay. Special rules apply to active duty military taxpayers.
California remain unchanged. Military servicemembers domiciled in California
Get FTB Pub. 1032 for more information.
must include their military pay in total income. In addition, they must include
their military pay as California source income when stationed in California.
Sick pay received under the Federal Insurance Contributions Act and
However, military pay is not California source income when a servicemember
Railroad Retirement Act. California excludes this item from income. Enter in
is permanently stationed outside of California. Beginning 2009, the federal
column B the amount of these benefits included in the amount in column A.
Military Spouses Residency Relief Act may affect the California income tax
Ridesharing fringe benefit differences. Under federal law, qualified
filing requirements for spouses of military personnel. For more information,
transportation benefits are excluded from gross income. Under the R&TC,
get FTB Pub. 1032, Tax Information for Military Personnel.
there are no monthly limits for the exclusion of these benefits and California’s
definitions are more expansive. Enter the amount of ridesharing benefits
Purpose
received and included in federal income on line 7, column B.
Exclusion for compensation from exercising a California Qualified Stock
Use Schedule CA (540), California Adjustments – Residents, to make
Option (CQSO). To claim this exclusion:
adjustments to your federal adjusted gross income and to your federal
• Your earned income is $40,000 or less from the corporation granting the
itemized deductions using California law.
CQSO.
• The market value of the options granted to you must be less than
Specific Line Instructions
$100,000.
• The total number of shares must be 1,000 or less.
Part I Income Adjustment Schedule
• The corporation issuing the stock must designate that the stock issued is a
CQSO at the time the option is granted.
Column A — Federal Amounts
If you included an amount qualifying for this exclusion in federal income,
Line 7 through Line 21
enter that amount in column B.
Enter on line 7 through line 21 the same amounts you entered on your
Employer health savings account (HSA) contribution. Enter the amount of
federal Form 1040, U.S. Individual Income Tax Return, line 7 through line 21;
any employer HSA contribution from federal Form W-2, box 12, code W on
Form 1040A, U.S. Individual Income Tax Return, line 7 through line 14b;
line 7, column C.
or Form 1040EZ, Income Tax Return for Single and Joint Filers With No
Dependents, line 1, line 2, and line 3.
Income exclusion for In-Home Supportive Services (IHSS) supplementary
payments – If you are an IHSS provider who received IHSS supplementary
Line 22 – Total
payments that was included in federal wages, enter the IHSS supplementary
Combine the amounts on line 7 through line 21.
payments on line 7, column B. IHSS providers only receive a supplementary
payment if they paid a sales tax on the IHSS services they provide. The
supplementary payment is equal to the sales tax paid plus any increase in the
federal payroll withholding paid due to the supplementary payment.
Schedule CA (540) Instructions 2013 Page 1

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