Note: the process for entering manual income adjustments is described in the section immediately above.


California taxes as income certain items which aren’t federally taxable. These should appear on CA Schedule CA, Part I (the specific section and line number are listed in brackets below), but as noted in the section above, in TaxSlayer they appear only on Section B line 8z.

  • [Section A, line 1a] Wages – HSA employer contributions – see Health Savings Accounts in CA, page 112.
    • The CA adjustment is done automatically by TaxSlayer. 
  • [A, 2] Interest from non-CA state and municipal bonds – see 1040 Line 2, page 33.
    • TaxSlayer’s page allows an amount of tax-exempt interest to be specified as taxable on the state return.
  • [A, 2] Interest or other income earned in an HSA – see Health Savings Accounts in CA, page 112.
    • The CA adjustment must be manually entered; it posts to CA Schedule CA Part I, Section B line 8z.
  • [A, 3] Dividends from non-CA municipal bond funds – see 1040 Line 3, page 35.
    • The amount to be taxable, if any, by the state can be specified in TaxSlayer, and so the CA adjustment is done automatically by TaxSlayer.
  • [A, 5] Survivor benefits (on a Form 1099-R) attributable to service by a public safety officer who was killed in the line of duty before January 1, 1997, are excludible from federal income tax; CA does not conform.
    • The CA adjustment must be manually entered; it posts to Section B line 8z.
  • [A, 5] Canadian and German Social Security (all other retirement payments from foreign governments are out-of-scope, as discussed on page 48).
    • The CA adjustment for Canadian and German social security payments must be manually entered; it posts to Section B line 8z.
  • [Section B, line 8z] Withdrawals from 529 plans that are used for K-12 expenses
    • If the taxpayer has a Form 1099-Q, discussed on page 68, you must ask the taxpayer whether qualified expenses covered by the withdrawals included any of the following; if so, that part of the withdrawal is taxable income for CA, and a manual adjustment is required: (1) expenses at the K-12 level; (2) apprenticeship costs; and (3) up to $10,000 of qualified student loan principal and/or interest payments.
  • [Section C, line 20] IRA contributions after age 70 ½, as discussed on page 73.
    • The CA adjustment must be manually entered; it posts to Section B, line 8z.

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