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Unemployment Compensation on CA return

Level 1

Good afternoon,

I believe that I have just come across an issue and have a question regarding Unemployment Compensation (UC) in California.  The recent Federal changes enabled taxpayers to reduce their taxable UC on the Federal return up to $10,200 per taxpayer if qualified.  Proseries updated accomplished this by forcing a negative $10,200 per taxpayer on Schedule 1 Part I #8 Other Income with a remark "UCE".  Proseries for the California return then forces the negative $10,200 on CA (540) Section B #8 A (Fed amounts) and places it as a California Addition Section C, thus taking the Federal reduction of Unemployment Compensation and adding it back into the California Adjusted Income as taxable income when California doesn't tax Unemployment Compensation.  

Any suggestions on how to correct this?

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2 Replies 2
Level 15
Level 15

It is correct, that excluded amount needs to be added back to CA.

CA does not tax unemployment at all, it deducts the entire thing, but it starts with the fed AGI which already has that 10,200 excluded....so that 10200 needs to be added back to CA.

Level 5

Hawaii did not adopt the Federal waiver of the first 10200 either so it also shows as an addition on Hawaii returns. I do not understand why Hawaii is taxing this money...they didn't pay the unemployment that was received from the IRS, it was given to them through stimulus funds. I find this outrageous.

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