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Troubleshooting California ref. 1126 - wage adjustment on Schedule CA (540NR), line 7b in ProConnect

SOLVEDby IntuitUpdated July 13, 2023

The following critical diagnostic is generating in ProConnect:

The wage adjustment on California Schedule CA (540NR) line 7b may be incorrect. Typically, it is incorrect to use "State wages, if different" to allocate wages on a nonresident return. This could result in an incorrect tax calculation on Form 540NR. See California FTB Publication 1001 for items that can create a wage subtraction on the California return. Generally, line 7a and 7d should equal each other, with the line 7e reflecting only the California "source" portion. Refer to the Multi-state/Nonresident section of the for correct wage "sourcing" procedures. (ref. #1126)

Follow these steps to resolve this diagnostic:

  1. From the Input Return tab, go to Income Wages, Salaries, Tips.
  2. Scroll down to the State and Local section. 
  3. Remove the amount entered in (16) State wages, if different.

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