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?
You enter it on the Tax Paymnets worksheet, that gets it on the Sch A for federal.
Then go to the CA return and in the list of forms grab the 593 and fill it in, that will get it to be included properly on the CA return and still able to be Efiled (if you just manually enter the number on the CA return on Line B of the smart worksheet above line 81.
Ok, I entered the 593 first, and then went back to the Sch. A to put it there (I wasn't sure she would be itemizing, so I skipped that step while doing the federal). Is that why it's not working? And if so, how do I fix it? Do I need to delete the 593, save it with the itemized deduction, and then re-enter the 593?
On mine, on the "smart worksheet," the line A is blank, line B has the $4k (pulled from the 593), and line C is blank. Even if I get line A to read $4k like it should, once it subtracted it again, it would still net to $0, which would still be wrong.
So (a) how do I get the correct about to show up in line A? and
(b) Even if I do that, it looks like CA will not allow me to claim that refund, but just take the federal itemized deductions, which still seems wrong to me.