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Screen CAAdj-2 - California Adjustments to Deductions (1040)
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Overview
Use this screen to complete Schedule CA (540), California Adjustments (Resident), or Schedule CA (540NR), California Adjustments (Nonresident or Part-Year Resident), and the California Student Loan Worksheet. If information transferred from UltraTax/1040 does not require additional data or coding, UltraTax/1040-CA shows it on the form only, not in the input screen.
Adjustments to Income - Differences for California Law
UltraTax CS uses the amounts entered in this section to complete Schedule CA (540) and CA (540NR).
Keogh, Self-employed pension and Simple plan
UltraTax CS automatically calculates the instate percentage of the federal deductions on the California Net Earnings from Self-Employment Worksheet when a self-employed health insurance or Keogh/SEP deduction is included in the federal return. Amounts entered in this field transfer to the Schedule CA (540NR), column E, in lieu of the calculated amounts.
Self-employed health insurance
Enter the self-employed health insurance deduction taken on federal Form 1040 generated from insurance payments for family members. An entry in this field reduces the self-employed health insurance adjustment on Schedule CA.
Alimony paid (Force)
UltraTax CS automatically calculates the in-state subtraction for this adjustment based on federal data entry. Use this field to force an amount different from the calculated amount.
IRA deduction (Force)
UltraTax CS automatically calculates the allowed California source IRA deduction for Schedule CA (540NR), line 32, column E. Per FTB instructions, the amount is the lesser of the federal deduction or the amount of California source compensation and self-employment income. Use this field to force an amount different from the calculated amount.
IRA - Military income adjustment
UltraTax CS automatically calculates the California Military Income IRA Deduction Adjustment Worksheet or the California IRA Deduction Adjustment Worksheet For Social Security Recipients with Exempt Military Income from data entered in the CANRPY and CAIRA Screens. The adjustment calculated is included on Schedule CA or CA (NR), line 36.
Student loan (Force): Additions To Adjustments
UltraTax CS automatically calculates the student loan deduction adjustment including the amount entered as a subtraction to wages as excludable military wages when the
Wages subtraction includes 1/2 military pay
field in the CAAdj Screen is marked. An amount entered in this field is included as the adjustment on Schedules CA and CA (540NR) and stops the calculation of the California Student Loan Worksheet.Student loan (Force): (Part-year / Nonresident only)
UltraTax CS automatically calculates the student loan deduction adjustment for part-year and nonresident returns from the number of days of residency entered in the CANRPY Screen. Enter an amount if different from the calculated amount to be included as the adjustment on Schedule CA (540NR), Column E.
Archer medical savings account / .../ Deductible portion of self-employment tax
UltraTax CS automatically calculates the in-state deduction allowed from federal data entry. Amounts entered in this field transfer to the Schedule CA (540NR), column E, in lieu of the calculated amounts.
Adjustments to Federal Itemized Deductions
Use this section to report adjustments on Schedule CA(540) and Schedule CA(540NR) for federal itemized deductions.
Standard or itemized deduction(s) (Force)
Schedule CA and Schedule CA (540NR) automatically use the larger of the Standard or Itemized deduction. Enter
1
to force the standard deduction or 2
to force itemized deductions.Home mortgage interest and points reported on Form 1098 addition (Force) / Home mortgage interest not reported on Form 1098 addition (Force)
Schedule CA(540) calculates an addition to the home mortgage interest deduction allowed on federal Schedule A for the following:
- Deduction disallowed on federal return attributable to Form 8396 credit
- Deduction disallowed on federal return for mortgage interest payments entered asMortgage Typecode1(Not used to buy, build, improve home) entered on the federal A Screen.
Use this field to force the addition amount.
Qualified Charitable Contributions (Force)
Use these fields to force qualified current year contribution amounts on the California Charitable Contribution Worksheet.
Additional adjustments to Other federal itemized deductions (Force)
Adjustments to Other federal itemized deductions for gambling losses and CA lottery losses (
State use
code 2
on fed W2G Screen and code 1
in fed Screen A statement Gambling losses
) calculate automatically on Schedule CA(540). Use this statement to force the adjustment amounts.Itemized Deductions Subject to 2% AGI Limitation
Unreimbursed employee expenses - Other
Enter qualifying unreimbursed employee expenses not entered on the federal A-St Screen, W2 Screen (Box14, code 9, Union dues), OtherAdj Screen (Educator expenses), or CA2106 Screen.
Other expenses subject to 2% limitation (Force)
Certain other expenses subject to 2% AGI limitation calculate automatically on Sch CA(540). Use this statement to force the amounts.
Additional expenses subject to 2% limitation
Enter additional other expenses subject to 2% AGI limitation for Sch CA(540) not already entered on the federal A-St Screen. Enter a code to select a description or enter a custom description.
Other Itemized Deductions
Health savings account (HSA) expenses and other adjustments (Force)
The California Medical Expenses Deduction Worksheet includes an amount for allowed Health Savings Account expenses entered in the federal 1099SA Screen and any other necessary adjustments to qualifying medical expenses under California law. Specifically, for any given unit of the federal 1099SA Screen, if there is an amount in the
Amount of unreimbursed qualified medical expenses if less than gross distribution
field, the worksheet uses that amount in the calculation. If that field is blank but the All distributions were used to pay unreimbursed qualified medical expenses
field is marked, then the worksheet uses the amount from the Box 1 Gross distribution
field from that unit of the 1099SA Screen in the calculation.Use this field to force the amount that appears on the California Medical Expenses Deduction Worksheet. For example, if a taxpayer is categorized a contractor for federal purposes but an employee for California purposes with regard to certain, specific compensation income, there may be a difference in the amount of self-employment health insurance premiums to report as an itemized deduction. Or, if certain health insurance premiums qualify at the federal level as an itemized deduction but do not qualify at the California level because the taxpayer received a credit toward those premiums, there may be a difference. Thus, if there are any adjustments beyond adjustments for HSA, you must combine those adjustments into a single amount and enter here.
Medical and dental expenses adjustment - Military (Force)
For military personnel, use this field to force the Other adjustment to itemized deductions for medical expenses on Schedule CA(540NR) and to suppress the calculation of the Medical Expenses Deduction Worksheet.
Additional other itemized deductions
Enter additional qualified other itemized deductions for Sch CA(540) not subject to 2% AGI limitation and which do not have a corresponding deduction on federal Schedule A. Enter a code to select a description or enter a custom description.