Hello again everyone.

Client is a PY CA res. She sold property in CA before moving. Form 593 shows $4k was withheld from the sale of property and sent directly to FTB.

I would expect, once I entered that in ProSeries, that this amount would show up as an amount withheld on line 73, and be refunded to the client (who otherwise has no taxes to pay).

The amount shows up on a "smart worksheet," but does NOT flow through to line 73, and therefore the client has no refund.

Instead, the software is telling me the only way they can get credit for this tax paid is to claim it as a tax paid on Federal Schedule A.

But they should be able to claim it as BOTH a tax paid on federal Schedule A, AND as a tax withheld to be paid back. Is that not true? Like, if I have state tax withheld on a Form W-2, that gets credited on my state return, AND I can include it as an itemized deduction - tax paid (if I itemize deductions) on my federal return.

Is the software not working correctly, or is California screwing everyone out of thousands of dollars?

Labels (1)
0 Cheers