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California Free Printable 2023 Instructions for Schedule CA (540NR) California Adjustments - Nonresidents or Part-Year Residents for 2024 California California Adjustments - Nonresidents and Part-Year Residents

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California Adjustments - Nonresidents and Part-Year Residents
2023 Instructions for Schedule CA (540NR) California Adjustments - Nonresidents or Part-Year Residents

2023 Instructions for Schedule CA (540NR) California Adjustments — Nonresidents or Part-Year Residents References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and the ­California Revenue and Taxation Code (R&TC). What’s New Federal Veterans Auto and Education Improvement Act (VAEIA) of 2022 – The VAEIA was enacted on January 5, 2023, and made amendments to the federal Servicemembers Civil Relief Act (SCRA). California conforms to the following VAEIA provisions: • A spouse of a servicemember shall neither lose nor acquire a residence or domicile for purposes of taxation with respect to the person, personal property, or income of the spouse by reason of being absent or present in any tax jurisdiction of the United States solely to be with the servicemember in compliance with the servicemember’s military orders. • For any taxable year of the marriage, a servicemember and the spouse of such servicemember may elect to use for purposes of taxation, regardless of the date on which the marriage of the servicemember and the spouse occurred, any of the following: > The residence or domicile of the servicemember. > The residence or domicile of the spouse. > The permanent duty station of the servicemember. For more information, get FTB Pub. 1032, Tax Information for Military Personnel. Federal Consolidated Appropriations Act (CAA), 2023 – The CAA, 2023, was enacted on December 29, 2022, and it includes the federal Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act of 2022. In general, California Revenue and Taxation Code (R&TC) conforms to the changes to the retirement provisions under the SECURE 2.0 Act. California law does not conform to the federal changes that disallow a deduction for charitable conservation easement contributions when the amount of the contribution exceeds 2.5 times the sum of each partner’s relevant basis in the partnership. For more information on the allowance of the deduction for charitable conservation easement contributions for California income tax purposes, get FTB Notice 2023-02. For more general information, refer to the federal act and the California R&TC. Also, see Schedule CA (540NR), California Adjustments – Nonresidents or Part-Year Residents, specific line instructions in Part III, line 12. California Microbusiness COVID-19 Relief Grant – The gross income exclusion for the California Microbusiness COVID-19 Relief Grant is extended until taxable years beginning before January 1, 2025. For more information, see Schedule CA (540NR) General Information, specific line instructions in Part II, Section B, line 8z, and R&TC Section 17158.1. California Hope, Opportunity, Perseverance, and Empowerment (HOPE) for Children Trust Account Program – The California HOPE for Children Trust Account Act created the California HOPE for Children Trust Account Program for the purpose of providing an eligible child with a HOPE trust account. For taxable years beginning on or after January 1, 2023, California law allows an exclusion from gross income for any funds deposited, any investment returns accrued, and any accrued interest in a HOPE trust account and for any funds from a HOPE trust account that is withdrawn or transferred by an eligible youth. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17141.5. Interagency Council on Homelessness Payment Exclusion – For taxable years beginning on or after January 1, 2023, California law allows an exclusion from gross income for payments received pursuant to the California Welfare and Institutions Code Section 8257 by members of the Interagency Council on Homelessness, its advisory committee, or its working groups who are or have been homeless. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17131.13. Kincade Wildfire Exclusion – For taxable years beginning on or after January 1, 2020, and before January 1, 2028, California law allows a qualified taxpayer an exclusion from gross income for any qualified amount received in a settlement from Pacific Gas and Electric (PG&E) Company or its subsidiary relating to the 2019 Kincade Fire. If a qualified taxpayer included income for a qualified amount received from this settlement in a prior taxable year, the taxpayer can file an amended tax return for that year within the normal statute of limitations. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17139.2. Zogg Wildfire Exclusion – For taxable years beginning on or after January 1, 2020, and before January 1, 2028, California law allows a qualified taxpayer an exclusion from gross income for any qualified amount received in a settlement from PG&E Company or its subsidiary relating to the 2020 Zogg Fire. If a qualified taxpayer included income for a qualified amount received from this settlement in a prior taxable year, the taxpayer can file an amended tax return for that year within the normal statute of limitations. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17139.3. Discharge of Student Fees – For taxable years beginning on or after January 1, 2022, and before January 1, 2027, California law allows an exclusion from gross income for any amount of unpaid fees due or owed by a student to a community college that was discharged pursuant to California Education Code Section 32527. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17131.21. Guaranteed Income Pilot Program Payment Exclusion – Beginning on June 30, 2022, and before July 1, 2026, California law allows an exclusion from gross income for any payments received by an individual from a guaranteed income pilot program or project that receives a grant pursuant to California Welfare and Institution Code Section 18997. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17131.12. General Information In general, for taxable years beginning on or after January 1, 2015, California law conforms to the Internal Revenue Code (IRC) as of January 1, 2015. However, there are continuing differences between California and federal law. When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level. For more information, go to ftb.ca.gov and search for conformity. ­Additional information can be found in FTB Pub. 1001, Supplemental Guidelines to California Adjustments, and the Business Entity tax booklets. The instructions provided with California tax forms are a summary of California tax law and are only intended to aid taxpayers in preparing their state income tax returns. We include information that is most useful to the greatest number of taxpayers in the limited space available. It is not possible to include all requirements of the California R&TC in the instructions. Taxpayers should not consider the instructions as authoritative law. Conformity For updates regarding federal acts, go to ftb.ca.gov and search for conformity. Federal Acts – In general, the R&TC does not conform to the changes under the following federal acts. California taxpayers continue to follow the IRC as of the specified date of January 1, 2015, with modifications. For specific adjustments due to the following acts, see Schedule CA (540NR) specific line instructions: • American Rescue Plan Act (ARPA) of 2021 (enacted on March 11, 2021) • Consolidated Appropriations Act (CAA), 2021 (enacted on December 27, 2020) • Setting Every Community Up for Retirement Enhancement (SECURE) Act (enacted on December 20, 2019) Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant – For taxable years beginning on or after January 1, 2021, and before January 1, 2030, California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Small Business and Nonprofit COVID-19 Schedule CA (540NR) Instructions  2023  Page 1 Supplemental Paid Sick Leave Relief Grant Program that is established by Section 12100.975 of the Government Code. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17158. Turf Replacement Water Conservation Program – For taxable years beginning on or after January 1, 2022, and before January 1, 2027, California law allows an exclusion from gross income for any amount received as a rebate, voucher, or other financial incentive issued by a public water system, as defined, local government, or state agency for participation in a turf replacement water conservation program. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17138.2. Fire Victims Trust Exclusion – For taxable years beginning before January 1, 2028, California law allows a qualified taxpayer an exclusion from gross income for any amount received from the Fire Victims Trust, established pursuant to the order of the United States Bankruptcy Court for the Northern District of California dated June 20, 2020, case number 19-30088, docket number 8053. If a qualified taxpayer included income for an amount received from the Fire Victims Trust in a prior taxable year, the taxpayer can file an amended tax return for that year. If the normal statute of limitations has expired, the taxpayer must have filed a claim by September 29, 2023. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17138.5. Thomas and Woolsey Wildfires Exclusion – For taxable years beginning before January 1, 2027, California law allows a qualified taxpayer an exclusion from gross income for any amount received in a settlement from Southern California Edison for claims relating to the 2017 Thomas Fire or the 2018 Woolsey Fire. If a qualified taxpayer included income for an amount received from these settlements in a prior taxable year, the taxpayer can file an amended tax return for that year. If the normal statute of limitations has expired, the taxpayer must have filed a claim by September 29, 2023. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17138.6. Reporting Requirements –Taxpayers may need to file form FTB 4197, Information on Tax Expenditure Items, with the tax return to report tax expenditure items as part of the Franchise Tax Board’s (FTB) annual reporting requirements under R&TC Section 41. To determine if you have an R&TC Section 41 reporting requirement, see the R&TC Section 41 Reporting Requirements section in 540NR, Nonresident or Part-Year Resident Booklet, or get form FTB 4197. Expanded Definition of Qualified Higher Education Expenses – For taxable years beginning on or after January 1, 2021, California law conforms to the expanded definition of qualified higher education expenses associated with participation in a registered apprenticeship program and payment on the principal or interest of a qualified education loan under the federal Further Consolidated Appropriations Act, 2020. California Venues Grant – For taxable years beginning on or after September 1, 2020, and before January 1, 2030, California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Venues Grant Program that is administered by the Office of Small Business Advocate (CalOSBA). For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z and R&TC Section 17158. California Microbusiness COVID-19 Relief Grant – For taxable years beginning on or after January 1, 2020, and before January 1, 2025, California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Microbusiness COVID-19 Relief Program that is administered by CalOSBA. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z. Other Loan Forgiveness – For taxable years beginning on or after January 1, 2019, California law allows an exclusion from gross income for borrowers of forgiveness of indebtedness described in Section 1109(d)(2)(D) of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act as stated by section 278, Division N of the CAA, 2021. The CAA, 2021, allows deductions for eligible expenses paid for with covered loan amounts. California law Page 2  Schedule CA (540NR) Instructions  2023 conforms to this federal provision, with modifications. For California purposes, these deductions generally do not apply to an ineligible entity. “Ineligible entity” means a taxpayer that is either a publicly-traded company or does not meet the 25% reduction from gross receipts requirements under Section 311 of the CAA, 2021. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 3 or go to ftb.ca.gov and search for AB 80. Shuttered Venue Operator Grant – For taxable years beginning on or after January 1, 2019, California law allows an exclusion from gross income for amounts awarded as a shuttered venue operator grant under the CAA, 2021. The CAA, 2021, allows deductions for eligible expenses paid for with grant amounts. California law conforms to this federal provision, with modifications. For California purposes, these deductions do not apply to an ineligible entity. “Ineligible entity” means a taxpayer that is either a publicly-traded company or does not meet the 25% reduction from gross receipts requirements under Section 311 of Division N of the CAA, 2021. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 3, or R&TC Section 17158.3. Small Business COVID-19 Relief Grant Program – For taxable years beginning on or after January 1, 2020, and before January 1, 2030, California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the COVID-19 Relief Grant under Executive Order No. E 20/21-182 and the California Small Business COVID-19 Relief Grant Program established by Section 12100.83 of the Government Code. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z. Income Exclusion for Rent Forgiveness – For taxable years beginning on or after January 1, 2020, and before January 1, 2025, gross income shall not include a tenant’s rent liability that is forgiven by a landlord or rent forgiveness provided through funds grantees received as a direct allocation from the Secretary of the Treasury based on the CAA, 2021. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8z. Moving Expense Deduction – For taxable years beginning on or after January 1, 2021, taxpayers should file California form FTB 3913, Moving Expense Deduction, to claim moving expense deductions. Attach the completed form FTB 3913 to Form 540NR, California Nonresident or Part-Year Resident Income Tax Return. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section C, line 14, and get form FTB 3913. Paycheck Protection Program (PPP) Loans Forgiveness – For taxable years beginning on or after January 1, 2019, California law allows an exclusion from gross income for covered loan amounts forgiven under the federal CARES Act, Paycheck Protection Program and Health Care Enhancement Act, Paycheck Protection Program Flexibility Act of 2020, the CAA, 2021, or the PPP Extension Act of 2021. Also, the ARPA expands PPP eligibility to include “additional covered nonprofit entities” which includes certain Code 501(c) nonprofit organizations and Internet-only news publishers and Internet-only periodical publishers. California law does not conform to this expansion of PPP eligibility. The CAA, 2021, allows deductions for eligible expenses paid for with covered loan amounts. California law conforms to this federal provision, with modifications. For California purposes, these deductions do not apply to an ineligible entity. “Ineligible entity” means a taxpayer that is either a publicly-traded company or does not meet the 25% reduction from gross receipts requirements under Section 311 of Division N of the CAA, 2021. For more information, see specific line instructions for Schedule CA (540NR) in Part II, Section B, line 3 or R&TC Section 17131.8 or go to ftb.ca.gov and search for AB 80. SECURE Act Repeal of Maximum Age 70½ – The SECURE Act repealed the maximum age of 70½ for traditional IRA contributions. California law does not conform to this federal provision. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section C, line 20. Coronavirus Aid, Relief, and Economic Security (CARES) Act – The CARES Act was enacted on March 27, 2020. In general, the R&TC does not conform to the changes. California taxpayers continue to follow the IRC as of the specified date of January 1, 2015, with modifications. California law does not conform to the following federal provisions under the CARES Act: • Exclusion for certain employer payment of student loans • Health-savings account changes The above list is not intended to be all-inclusive of the federal and state conformities and differences. For more information, see specific line instructions or refer to the R&TC. Worker Status: Employees and Independent Contractors – Some individuals may be classified as independent contractors for federal purposes and employees for California purposes, which may also cause changes in how their income and deductions are classified. Proposition 22 was operative as of December 16, 2020, and may affect a taxpayer’s worker classification. For more information, see Schedule CA (540NR) specific line instructions in Part II, Section A, line 1a; Part II, Section B, line 3; Part II, Section C, line 15 and line 17; and Part III, line 4. Rental Real Estate Activities – For taxable years beginning on or after January 1, 2020, the dollar limitation for the offset for rental real estate activities shall not apply to the low income housing credit program. For more information, see R&TC Section 17561(d)(1). Get form FTB 3801-CR, Passive Activity Credit Limitations, for more information. Commercial Cannabis Activity – Beginning in taxable year 2020, California allows individuals and other taxpayers operating under the personal income tax law to claim credits and deduction of business expenses paid or incurred during the taxable year in conducting commercial cannabis activity. Sole proprietors are those that conduct a commercial cannabis activity that is licensed under California Medicinal and Adult-Use Cannabis Regulation and Safety Act (CA MAUCRSA). For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 3, and get form FTB 4197. Excess Business Loss Limitation – The CARES Act made amendments to IRC Section 461(l) by eliminating the excess business loss limitation of noncorporate taxpayers for taxable year 2020 and retroactively removing the limitation for taxable years 2018 and 2019. California law does not conform to those amendments. Also, California law does not conform to the federal changes in the ARPA and the federal Inflation Reduction Act of 2022 that extend the limitation on excess business losses of noncorporate taxpayers for taxable years beginning after December 31, 2020, and ending before January 1, 2029. Complete form FTB 3461, California Limitation on Business Losses, if you are a noncorporate taxpayer and your net losses from all of your trades or businesses are more than $289,000 ($578,000 for married/RDP taxpayers filing a joint return). For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 8p, and get form FTB 3461. Alimony – California law does not conform to changes made by the TCJA to federal law regarding alimony and separate maintenance payments that are not deductible by the payor spouse, and are not includable in the income of the receiving spouse, if made under any divorce or separation agreement executed after December 31, 2018, or executed on or before December 31, 2018, and modified after that date (if the modification expressly provides that the amendments apply). For more information, see Schedule CA (540NR) specific line instructions in Part II, Section B, line 2a and Section C, line 19a. Federal Tax Reform – In general, California R&TC does not conform to all of the changes under the TCJA. For adjustments due to the TCJA, see the specific line instructions for the following items: • Combat zone extended to Egypt’s Sinai Peninsula • Moving expenses and reimbursements • Limitation on deduction of business interest • Limitation on employer’s deduction for fringe benefit expenses • Limitation on wagering losses • Sexual harassment settlements • Global intangible low-taxed income (GILTI) under IRC Section 951A • Qualified equity grants • Expanded use of IRC Section 529 account funds • Living expenses for members of Congress • Limitation on state and local tax deduction • Mortgage and home equity indebtedness interest deduction • Limitation on charitable contribution deduction • College athletic seating rights • Casualty or theft loss(es) • Miscellaneous itemized deductions Registered Domestic Partners (RDPs) – RDPs will compute their limitations based on the combined federal adjusted gross income (AGI) of each partner’s individual tax return filed with the Internal Revenue Service (IRS). For column A, Part II and Part III, combine each line item of your federal amounts from each partner’s individual federal tax return. For more information on RDPs, get FTB Pub. 737, Tax Information for Registered Domestic Partners. The combined federal AGI used to compute limitations is different from the recalculated federal AGI used on Form 540NR, line 13. In situations where RDPs have no RDP adjustments, these amounts may be the same. Military Personnel – Servicemembers domiciled outside of California and their spouses/RDPs may exclude the servicemember’s military compensation from gross income when computing the tax rate on nonmilitary income. Requirements for military servicemembers domiciled in California remain unchanged. Military servicemembers domiciled in California must include their military pay in total income. In addition, they must include their military pay as California source income when stationed in California. However, military pay is not California source income when a servicemember is permanently stationed outside of California. Beginning 2009, the federal Military Spouses Residency Relief Act may affect the California income tax filing requirements for spouses of military personnel. For more information, get FTB Pub. 1032. Amended Tax Returns – If you are an active duty military servicemember domiciled outside California and you included your military compensation in income from all sources, you may file an amended tax return for tax years with an open statute of limitations. For more information, get FTB Pub. 1032 and see instructions for amended returns in the 540NR booklet. Single Member Limited Liability Company (SMLLC) – If you are a single member limited liability company, that is organized or doing business in California, or registered with the California Secretary of State (SOS), you are required to file Form 568, Limited Liability Company Return of Income, pay the annual tax and LLC Fee (if applicable), in addition to filing your tax return. Get Form 568, Limited Liability Company Tax Booklet, for more information. Part-Year Residents – Complete the Part-Year Resident Worksheet at the end of Schedule CA (540NR) instructions to determine the amounts to enter on Part II, Section A, line 1a through line 7 and Section B, line 1 through line 10, column E. Tips to avoiding common mistakes on this schedule: • Column A – Copy the amounts from your federal tax return. Use the (b) amounts on line 2, line 3, line 4, line 5, and line 6, from your federal tax return. Form 1040, U.S. Individual Income Tax Return, line 11, or Form 1040-SR, U.S. Tax Return for Seniors, line 11, should equal Schedule CA (540NR), Part II, line 27, column A. • Column B (Part II, Section A, Line 1a through Line 7, and Section B, Line 1 through Line 7 and line 9a) – Subtract income that is not taxable to a California resident such as California lottery winnings and social security benefits. Do not use column B to deduct income that was earned while a nonresident of California or from sources outside of California. There must be a difference in state and federal tax law. Generally, if a full-year California resident cannot subtract income in column B, a nonresident or part-year resident may not subtract income in column B. • Column C (Part II, Section A, Line 1a through Line 7, and Section B, Line 1 through Line 7 and line 9a) – Add income that was not taxed on your federal tax return but is taxable to a California resident, such as foreign income or interest/dividends from non-California municipal bonds. • Column D – Combine the columns (column A - column B + column C). Part II, line 27, column D, should equal Form 540NR, line 17. The amounts in this column represent income earned from all sources as if you were a full‑year California resident, after applying California and federal law differences. • Column E – Enter all income from all sources while a resident of ­California and income from California sources while a nonresident. Schedule CA (540NR) Instructions  2023  Page 3 Purpose Use Schedule CA (540NR) to determine California taxable income by doing the following: • Identify the domiciles and current and past residency i­nformation. • Enter the amounts of income and deductions reported on your f­ederal tax return. • Adjust the income and deductions reported on your federal tax return for differences in California and federal law. • Determine the portion of income reported on your federal tax return that was earned or received while you were a California resident. • Determine the portion of income reported on your federal tax return that was earned or received from California sources while you were a nonresident. • Determine your allowable standard deduction or itemized deductions. Specific Line Instructions Part I Residency Information Answer all the questions in this part for you and your spouse/RDP. If a question does not apply, then leave the line blank. For more information, get: • FTB Pub. 1031, Guidelines for Determining Resident Status • FTB Pub. 1032, Tax Information for Military Personnel Use the two letter state abbreviations to complete this section. If you do not know your state abbreviation, visit the United States Postal Service website at usps.com for assistance. If you did not reside in the United States or a U.S. Possession, use the code “FC.” The code “FC” is the abbreviation for foreign country. Line 2 – Domicile and Military If you served in the military, your state of domicile is generally the state where you were living when you first entered military service. If you were not in the military, your domicile is the place you consider your permanent home, the place to which you, whenever absent, intend to return. Line 6 – The number of days I spent in California The total number of days in California should include all days in California for any purpose including residency, business, and vacation. Line 7 – I owned a home/property in California This includes property owned directly or indirectly through a trust or other entity. Line 8 – Before 2023: I was a California resident for the period of Enter your most recent period of California residency. If you became a nonresident during taxable year 2023, use December 31, 2022 as your end date. Part II Income Adjustment Schedule Column A — Federal Amounts Enter all the amounts shown on your federal tax return on the corresponding lines in column A. If married/RDP filing separately under either exception described in the instructions for Form 540NR, enter in column A the amounts you would have reported on a separate federal tax return. Attach a statement to the tax return showing how the income and expenses were split between you and your spouse/RDP. Section A, Line 1a through Line 7, and Section B, Line 1 through Line 9a Enter in Section A, line 1a through line 7, and Section B, line 1 through line 9a the same amounts entered on your federal Form 1040, 1040-SR, or 1040-NR, U.S. Nonresident Alien Income Tax Return, line 1a through line 7; and federal Schedule 1 (Form 1040), Additional Income and Adjustments to Income, line 1 through line 9. Line 10 – Total Combine the amounts in Section A, line 1z through line 7, and Section B, line 1 through line 7, and line 9a, as applicable. Enter the total on line 10. This number should be the same as the amount on federal Form 1040, 1040-SR, or 1040-NR, line 9. Section C, Line 11 through Line 18 and Line 20 through Line 25 Enter the same amounts entered on your federal Schedule 1 (Form 1040), line 11 through line 18 and line 20 through line 25. Page 4  Schedule CA (540NR) Instructions  2023 Line 19a and Line 19b Enter on line 19a the same amount entered on your federal Schedule 1 (Form 1040), line 19a. Enter on line 19b the social security number (SSN) or individual taxpayer identification number (ITIN) and last name of the person to whom you paid alimony. Line 26 – Add line 11 through line 23 and line 25. Line 27 – Total Subtract line 26 from line 10. This amount should be the same as the amount on federal Form 1040, 1040-SR, or 1040-NR, line 11. Column B and Column C — Subtractions and Additions Use these columns to enter subtractions and additions to federal amounts in column A that are necessary because of the differences between ­California and federal law. Enter all amounts in Section A, line 1a through line 7 and Section B and Section C, line 1 through line 26 as positive numbers unless instructed otherwise. Do not deduct income that was earned while a nonresident of California or from sources outside of California. There must be a difference in tax law. Generally, if a California resident cannot subtract the income in column B, a nonresident or part-year resident may not subtract income from column B. If you are a nonresident alien, use column B and column C to adjust federal AGI to include income from all sources, even if you were not required to report it on your federal tax return. ­California does not have special rules limiting total AGI from all sources to U.S. source or effectively connected income of nonresident aliens. You may need one of the following FTB publications to complete column B and column C: • 1001, Supplemental Guidelines to ­California Adjustments • 1005, Pension and Annuity Guidelines • 1031, Guidelines for Determining Resident Status • 1032, Tax Information for Military Personnel • 1100, Taxation of Nonresidents and Individuals Who Change ­Residency To get forms and publications, go to ftb.ca.gov/forms. Section A – Income Line 1a through Line 1i and Line 1z Generally, no adjustments are made on these lines. If you did not receive any of the following types of income, make no entry on line 1a through line 1i and line 1z in either column B or column C. Combat zone foreign earned income exclusion – For taxable years beginning on and after January 1, 2018, California does not conform to the federal foreign earned income exclusion for amounts received by certain U.S. citizens or resident aliens with an abode in the U.S., specifically contractors or employees of contractors supporting the U.S. Armed Forces in designated combat zones. Enter the amount excluded from federal income on Part II, Section B, line 8d, column C. Native American earned income exemption – California does not tax federally recognized tribal members living in California Indian country who earn income from any federally recognized California Indian country. Military compensation is considered income from reservation sources. Enrolled members who receive reservation sourced per capita income must reside in their affiliated tribe’s Indian country to qualify for tax exempt status. Enter on applicable line 1a through line 1h, column B the earnings included in federal income that are exempt for California. Attach form FTB 3504, Enrolled Tribal Member Certification, to Form 540NR. For more information, get form FTB 3504. Tax treaty – If you excluded income exempted by U.S. tax treaties on your federal Form 1040 or 1040-SR (unless specifically exempted for state purposes), enter the excluded amount on applicable line 1a through line 1h, column C. Sick pay received under the Federal Insurance Contributions Act and Railroad Retirement Act – California excludes this item from income. Enter on line 1a or line 1h as applicable, column B the amount of sick pay benefits received under the Federal Insurance Contributions Act and Railroad Retirement Act included in the amount in column A. a. Total Amount from Federal Form(s) W-2, Box 1 Employees and independent contractors – Some taxpayers may be classified as independent contractors for federal purposes and as employees for California purposes. If the taxpayer is classified as an employee for California purposes, enter the amount reported as gross income of the business from federal Schedule C (Form 1040), Profit or Loss from Business, line 7, as wages on line 1a, column C. Military pay adjustment – Compensation for military service of a servicemember domiciled outside of California is exempt from California tax. It is excluded from AGI from all sources. For more information, get FTB Pub. 1032. Active duty military servicemembers domiciled outside of California may claim an adjustment for active duty military pay. To claim the adjustment, write “MPA” to the left of column A or include it according to your software’s instructions and enter only the amount of your active duty military pay on line 1a, column B. Exclude this amount from column E. Nonresident compensation of merchant seamen and employees of rail carriers, motor carriers, and air carriers – Exclude the following from gross income: compensation for the performance of duties of certain merchant seamen, rail carriers, motor carriers, and air carriers. Enter the amount included in federal income on line 1a, column B. For more information, get FTB Pub. 1031. d. Medicaid Waiver Payments Not Reported on Federal Form(s) W-2 Income exclusion for In-Home Supportive Services (IHSS) supplementary payments – If you are an IHSS provider who received IHSS supplementary payments that were included in federal wages, enter the IHSS supplementary payments on line 1d, column B. IHSS providers only receive a supplementary payment if they paid a sales tax on the IHSS services they provide. The supplementary payment is equal to the sales tax paid plus any increase in the federal payroll withholding paid due to the supplementary payment. h. Other Earned Income Ridesharing fringe benefit differences – Under federal law, certain qualified transportation benefits are excluded from gross income. Under the R&TC, there are no monthly limits for the exclusion of these benefits and California’s definitions are more expansive. Enter the amount of ridesharing benefits received and included in federal income on line 1h, column B. Exclusion for compensation from exercising a California Qualified Stock Option (CQSO) – To claim this exclusion: • Your earned income is $40,000 or less from the corporation granting the CQSO. • The market value of the options granted to you must be less than $100,000. • The total number of shares must be 1,000 or less. • The corporation issuing the stock must designate that the stock issued is a CQSO at the time the option is granted. If you included in federal income an amount qualifying for this exclusion, enter that amount on line 1h, column B. Employer health savings account (HSA) contribution – Enter the amount of any employer HSA contribution from federal Form W-2, Wage and Tax Statement, box 12, code W on line 1h, column C. i. Nontaxable Combat Pay Election Combat zone extended to Egypt’s Sinai Peninsula – Federal law extended combat zone tax benefits to the Sinai Peninsula of Egypt. California law does not conform. Enter the amount of combat pay excluded from federal income on line 1i, column C. Get FTB Pub. 1032 for more information. Line 2 – Taxable Interest If you did not receive any of the kinds of income listed (within this line instructions), make no entry on this line in either column B or column C. Enter in column B the interest that you received from: • U.S. saving bonds (except for interest from series EE U.S. savings bonds issued after 1989 that qualified for the Education Savings Bond Program exclusion). • U.S. Treasury Bills, notes, and bonds. • Any other bonds or obligations of the United States and its territories. • Interest from Ottoman Turkish Empire settlement payments. • Interest income from children under age 19 or students under age 24 included on the child’s federal tax return and reported on the California tax return by the parent. For more information, get form FTB 3803, Parents’ Election to Report Child’s Interest and Dividends. Certain mutual funds pay “exempt-interest dividends.” If the mutual fund has at least 50% of its assets invested in tax-exempt U.S. obligations and/or in California or its municipal obligations, that amount of dividend is exempt from California tax. The proportion of dividends that are tax-exempt will be shown on your annual statement or statement issued with federal Form 1099-DIV, Dividends and Distributions. For more information, get FTB Pub. 1001. Enter in column C the interest you identified as tax-exempt interest on your federal Form 1040, 1040-SR, or 1040-NR, line 2a; and which you received from: • The federally exempt interest dividends from other states, or their municipal obligations and/or from mutual funds that do not meet the 50% rule as previously stated. • Non-California state bonds. • Non-California municipal bonds issued by a county, city, town, or other local government unit. • Obligations of the District of Columbia issued after December 27, 1973. • Non-California bonds if the interest was passed through to you from S corporations, trusts, partnerships, or Limited Liability Companies (LLCs). • Interest or other earnings from an HSA are not treated as tax deferred. Interest or earnings in an HSA are taxable in the year earned. • Interest on any bond or other obligation issued by the Government of American Samoa. • Interest income from children under age 19 or students under age 24 included on the parent’s federal tax return and reported on the California tax return by the child. Make no entries in either column B or column C for interest earned on Federal National Mortgage Association (Fannie Mae) Bonds, Government National Mortgage Association (Ginnie Mae) Bonds, and Federal Home Loan Mortgage Corporations (FHLMC) securities, or grants paid to low‑income individuals. Get FTB Pub. 1001 if you received interest income from the items listed (within this line instructions) that is passed through to you from S corporations, trusts, partnerships, or LLCs. Line 3 – Ordinary Dividends Generally, no difference exists between the amount of dividends reported in column A and the amount reported using California law. However, California taxes dividends derived from other states and their municipal obligations. Enter in column B dividend income from children under age 19 and students under age 24, included on the parent’s or child’s federal tax return and reported on the California tax return by the opposite taxpayer. Enter in column C dividend income from children under age 19 and students under age 24, excluded on the parent’s or child’s federal tax return and reported on the California tax return by the opposite taxpayer. For more information, get form FTB 3803. Get FTB Pub. 1001 if you received dividend income from: • Noncash patronage dividends from farmers’ cooperatives or mutual associations. • A controlled foreign corporation (CFC). • Distribution of pre-1987 earnings from S corporations. • Undistributed capital gains for regulated investment company (RIC) shareholders. Line 4a and Line 4b – IRA Distributions Beginning with tax year 2002, calculate your IRA basis as if you were a California resident for all prior years. Generally, no adjustments are made on this line. However, there may be significant differences in the taxable amount of a distribution (including a distribution from conversion of a traditional IRA to a Roth IRA) depending on when you made your IRA contributions. California did not conform to the $2,000 or 100% of compensation annual contribution limit permitted under federal law from 1982 through 1986. During these years, California limited the deduction to the lesser of 15% of compensation or $1,500 and disallowed a deduction Schedule CA (540NR) Instructions  2023  Page 5 altogether to individuals who were active participants in qualified government plans. Any amount an individual contributed in excess of California deduction limits during these years creates a basis in the IRA. Differences also occur if your California IRA deductions were different from your federal deductions because of differences between California and federal self‑employment income. If the taxable amount using California law is: • Less than the amount taxable under federal law, enter the difference in column B. • More than the amount taxable under federal law, enter the difference in column C. Get FTB Pub. 1005 for more information and worksheets for figuring the adjustment to enter on this line, if any. Coverdell Education Savings Account (ESA) formerly known as Education (ED) IRA – If column A includes a taxable distribution from an ED IRA, you may owe additional tax on that amount. Get form FTB 3805P, Additional Taxes on Qualified Plans (Including IRAs) and Other TaxFavored Accounts. Line 5a and Line 5b – Pensions and Annuities Generally, no adjustments are made on this line. However, if you received Tier 2 railroad retirement benefits or partially taxable distributions from a pension plan, you may need to make the following adjustments. If you received a federal Form RRB-1099-R, Annuities or Pensions by the Railroad Retirement Board, for railroad retirement benefits and included all or part of these benefits in taxable income in column A, enter the taxable benefit amount in column B. If you began receiving a retirement annuity between July 1, 1986, and January 1, 1987, and elected to use the three-year rule for California purposes and the annuity rules for federal purposes, enter in column C the amount of the annuity payments you excluded for federal purposes. You may have to pay an additional tax if you received a taxable distribution from a qualified retirement plan before reaching age 59½ and the distribution was not rolled over into another qualified plan. Get form FTB 3805P for more information. Line 6 – Social Security Benefits California excludes U.S. social security benefits or equivalent Tier 1 railroad retirement benefits from taxable income. Enter in column B the amount of taxable U.S. social security benefits or equivalent Tier 1 railroad retirement benefits shown on line 6b, column A. Line 7 – Capital Gain or (Loss) Generally, no adjustments are made on this line. California taxes long and short term capital gains as regular income. No special rate for long term capital gains exists. However, the California basis of the assets listed (within this line instructions) may be different from the federal basis due to differences between California and federal laws. If there are differences, use Schedule D (540NR), California Capital Gain or Loss Adjustment, to calculate the amount to enter on line 7. • Gain or loss from the sale of investments inside an HSA. • Gain on the sale of qualified small business stock under IRC Section 1045 and IRC Section 1202. • Basis amounts resulting from differences between C ­ alifornia and federal law in prior years. • Gain or loss on stock and bond ­transactions. • Installment sale gain reported on form FTB 3805E, Installment Sale Income. • Gain on the sale of personal residence where depreciation was ­allowable. • Pass-through gain or loss from partnerships, fiduciaries, S corporations, or LLCs. • Capital loss carryover from your 2022 ­California Schedule D (540NR). • Capital gain from children under age 19 or students under age 24 included on the parent’s or child’s federal tax return and reported on the California tax return by the opposite taxpayer. For more information, get form FTB 3803. Get FTB Pub. 1001 for more information about: • Disposition of S corporation stock acquired before 1987. • Capital gain exclusion for sale of principal residence by a surviving spouse. Page 6  Schedule CA (540NR) Instructions  2023 • Gain on the sale or disposition of a qualified assisted housing development to low-income residents or to specified entities maintaining housing for low‑income residents. • Undistributed capital gain for RIC shareholders. • Gain or loss on the sale of property inherited before January 1, 1987. • Capital loss carrybacks. Section B – Additional Income Line 1 – Taxable Refunds, Credits, or Offsets of State and Local Income Taxes California does not tax the state income tax refund. Enter in column B the amount of state tax refund entered in column A. Line 2a – Alimony Received Under federal law, the TCJA, alimony and separate maintenance payments are not includable in the income of the receiving spouse, if made under any divorce or separation agreement executed after December 31, 2018, or executed on or before December 31, 2018, and modified after that date (if the modification expressly provides that the amendments apply). California law does not conform. If you received alimony not included in your federal income, enter the alimony received in column C. If you are a nonresident alien and received alimony not included in your federal income, enter the alimony on this line in column C. Line 3 – Business Income or (Loss) Adjustments to federal business income or loss you reported in column A generally are necessary because of the difference between California and federal law relating to depreciation methods, special credits, and accelerated write-offs. As a result, the recovery period or basis used to figure ­California depreciation may be different from the amount used for federal purposes. Adjustments are figured on form FTB 3885A, Depreciation and Amortization Adjustments, and are most commonly necessary because of the following: • Before January 1, 1987, California did not allow depreciation under the federal accelerated cost recovery system. Continue to figure C ­ alifornia depreciation for those assets in the same manner as prior years. • On or after January 1, 1987, California provides special credits and accelerated write-offs that affect the ­California basis of qualifying ­assets. Refer to the bulleted list below. Use form FTB 3801, Passive Activity Loss Limitations, to figure the total adjustment for line 3 if you have: • One or more passive activities that produce a loss. • One or more passive activities that produce a loss and any nonpassive activity reported on federal Schedule C (Form 1040). Use form FTB 3885A to figure the total adjustment for line 3 if you have: • Only nonpassive activities which produce either gains or losses (or a combination of gains and losses). • Passive activities that produce gains. Other loan forgiveness – Under federal law, the CAA, 2021, allows deductions for eligible expenses paid for with covered loan amounts. California law conforms to this federal provision, with modifications. For California purposes, if you are an ineligible entity and deducted eligible expenses for federal purposes, enter the total amount of those expenses deducted on line 3, column C. Paycheck Protection Program loans forgiveness – Under federal law, the CAA, 2021, allows deductions for eligible expenses paid for with covered loan amounts. California law conforms to this federal provision with modifications. For California purposes, if you are an ineligible entity and deducted eligible expenses for federal purposes, enter the total amount of those expenses deducted on line 3, column C. Also, the ARPA expands PPP eligibility to include “additional covered nonprofit entities” which includes certain Code 501(c) nonprofit organizations and Internet-only news publishers and Internet-only periodical publishers. California law does not conform to this expansion of PPP eligibility. If you met the PPP eligibility requirements and excluded the amount from gross income for federal purposes, enter the excluded amount on line 3, column C. Shuttered venue operator grant – Under federal law, the CAA, 2021, allows deductions for eligible expenses paid for with grant amounts. California law conforms to this federal provision with modifications. For California purposes, if you are an ineligible entity and deducted eligible expenses for federal purposes, enter the total amount of those expenses deducted on line 3, column C. Employees and independent contractors – Some taxpayers may be classified as independent contractors for federal purposes and as employees for California purposes. If the taxpayer is classified as an employee for California purposes, enter the amount of federal business income from line 3, column A, on line 3, column B. Enter the amount of federal business loss from line 3, column A, on line 3, column C. Commercial cannabis activity – Under federal law, deductions for business expenses of a trade or business paid or incurred during the taxable year in conducting commercial cannabis activity are disallowed. California does not conform. California allows cannabis business licensed under CA MAUCRSA to claim these expenses. Enter the amount of these expenses on line 3, column B. Limitation on deduction of business interest – Under federal law, every business, regardless of its form, is generally subject to a disallowance of a deduction for net interest expense in excess of 30% of the business’s adjustable taxable income. California law does not conform. Figure the difference between the amounts allowed using federal law and California law. Enter the difference on line 3, column B. Limitation on employer’s deduction for fringe benefit expenses – Under federal law, deductions for entertainment expenses are disallowed; the current 50% limit on the deductibility of business meals is expanded to meals provided through an in-house cafeteria or otherwise on the premises of the employer; deductions for employee transportation fringe benefits (e.g., parking and mass transit) are denied; and no deduction is allowed for transportation expenses that are the equivalent of commuting for employees (e.g., between the employee’s home and the workplace), except as provided for the safety of the employee. California does not conform. Figure the difference between the amounts allowed using federal law and California law. Enter the difference on line 3, column B or column C. Limitation on wagering losses – Under federal law, all deductions for expenses incurred in carrying out wagering transactions, and not just gambling losses, are limited to the extent of gambling winnings. California law does not conform. Figure the difference between the amounts allowed using federal law and California law. Enter the difference on line 3, column B. Sexual harassment settlements – Under federal law, no deduction is allowed for any settlement, payout, or attorney fees related to sexual harassment or sexual abuse if such payments are subject to a nondisclosure agreement. California law does not conform. Enter the amount received and included in federal income on line 3, column B. Penalty assessed by professional sports league – California does not allow a business expense deduction for any fine or penalty paid or incurred by an owner of a professional sports franchise assessed or imposed by the professional sports league that includes that franchise. If the fine or penalty was deducted for federal purposes, enter this amount on line 3, column C. Business expense deduction disallowance – California disallows a deduction for a business expense related to a payment to the Edge College and Career Network, LLC, to a taxpayer who meets all of the following: • They are charged as a defendant in any of several specified criminal complaints as listed in R&TC Section 17275.4. • There is a final determination of their guilt with regard to a violation of any offense arising out of that criminal complaint. • There is a finding that they took the deduction unlawfully. For more information, see R&TC Section 17275.4. Enter the amount of this deduction on line 3, column C. Get FTB Pub. 1001 for more information about: Income related to: • Business, trade, or profession carried on within ­California that is an integral part of a unitary business carried on both within and outside ­California. • Pro-rata share of income received from a CFC by a U.S. shareholder. Basis adjustments related to: • Property acquired prior to becoming a ­California resident. • Sales or use tax credit for property used in a former Enterprise Zone (EZ), Local Agency Military Base Recovery Area (LAMBRA), or Targeted Tax Area (TTA). • Reduced recovery periods for fruit-bearing grapevines replaced in a California vineyard on or after January 1, 1992, as a result of phylloxera infestation; or on or after January 1, 1997, as a result of Pierce’s disease. • Expenditures for tertiary injectants. • Property placed in service on an Indian reservation after December 31, 2017, and before January 1, 2022. • Amortization of pollution control facilities. • Discharge of real property business ­indebtedness. • Vehicles used in an employer-sponsored ridesharing program. • An enhanced oil recovery system. • Joint Strike Fighter property costs. • The cost of making a business accessible to disabled individuals. • Property for which you received an energy conservation subsidy from a public utility on or after January 1, 1995, and before January 1, 1997. • Research and experimental expenditures. • Reduction of capitalized costs attributable to the federal Work Opportunity Credit. Business deductions related to: • Wages paid in a former EZ, LAMBRA, Manufacturing Enhancement Area (MEA), or TTA. • Abandonment or tax recoupment fees for open-space easements and timberland preserves. • Research expense. • Employer wage expense for the federal Work Opportunity Credit. • Pro-rata share of deductions received from a CFC by a U.S. shareholder. • Interest paid on indebtedness in connection with company-owned life insurance policies. • Premiums paid on life insurance policies, annuities or endowment contracts issued after June 8, 1997, where the owner of the business is directly or indirectly a policy beneficiary. • Commercial Revitalization Deductions for Renewal Communities. • Small Employer Health Insurance Credit. Line 4 – Other Gains or (Losses) Generally, no adjustments are made on this line. However, the ­California basis of your other assets may differ from your federal basis due to differences between ­California and federal law. Therefore, you may have to adjust the amount of other gains or losses. Get Schedule D‑1, Sales of Business Property, for more information. Line 5 – Rental Real Estate, Royalties, Partnerships, S Corporations, Trusts, etc. Adjustments to federal income or loss you reported in column A generally are necessary because of the difference between ­California and federal law relating to depreciation methods, special credits, and accelerated write‑offs. As a result, the recovery period or basis used to figure ­California depreciation may be different from the recovery period or amount used for federal purposes. For more information, see the ­instructions for Part II, Column B and Column C, Section B, line 3. California law does not conform to federal law for material ­participation in rental real estate activities. Beginning in 1994, and for federal purposes only, rental real estate activities conducted by persons in real property businesses are not automatically treated as passive activities. Get form FTB 3801 for more information. Use form FTB 3801 to figure the total adjustment for line 5 if you have: • One or more passive activities that produce a loss. • One or more passive activities that produce a loss and any nonpassive activity reported on federal Schedule E (Form 1040), Supplemental Income and Loss. Use form FTB 3885A to figure the total adjustment for line 5 if you have: • Only nonpassive activities which produce either gains or losses (or a combination of gains and losses). • Passive activities that produce gains. Schedule CA (540NR) Instructions  2023  Page 7 LLCs that are classified as partnerships for C ­ alifornia purposes and limited liability partnerships (LLPs) are subject to the same rules as other partnerships. LLCs report distributive items to members on Schedule K‑1 (568), Member’s Share of Income, Deductions, Credits, etc. LLPs report to partners on Schedule K-1 (565), Partner’s Share of Income, Deductions, Credits, etc. Get FTB Pub. 1001 for more information about accumulation distributions to beneficiaries for which the trust was not required to pay C ­ alifornia tax because the beneficiary’s interest was contingent. Line 6 – Farm Income or (Loss) Adjustments to federal income or loss you report in column A generally are necessary because of the difference between California and federal law relating to depreciation methods, special credits, NOLs, and accelerated write‑offs. As a result, the recovery period or the basis you should use to figure ­California depreciation may be different from the amount used for federal purposes, and you may need to make an adjustment to your farm income or loss. For more information about the types of income and adjustments that often require adjustments, see the instructions for Part II, Column B and Column C, Section B, line 3. Use form FTB 3801 to figure the total adjustment for line 6 if you have: • One or more passive activities that produce a loss. • One or more passive activities that produce a loss and any nonpassive activity reported on federal Schedule F (Form 1040), Profit or Loss From Farming. Use form FTB 3885A to figure the total adjustment for line 6 if you have: • Only nonpassive activities which produce either gains or losses (or a combination of gains and losses). • Passive activities that produce gains. Line 7 – Unemployment Compensation California excludes unemployment compensation from taxable income. Enter on line 7, c­ olumn B, the amount of unemployment compensation shown in column A. Paid Family Leave Insurance (PFL) benefits, also known as F­ amily Temporary Disability Insurance – Payments received from the PFL Program are reported on federal Form 1099-G, Certain Government Payments. California excludes payments received from the PFL program from taxable income. Enter on line 7, column B, the amount of PFL payments shown in column A. For more information, get FTB Pub. 1001. Line 8 – Other Income a. Federal Net Operating Loss – Enter the amount of the federal NOL included on line 8a, column A, as a positive number in column C. Get form FTB 3805V to figure the allowable California NOL. b. Gambling California lottery winnings – California excludes California lottery winnings from taxable income. Enter in column B the amount of California lottery winnings included in the federal amount on line 8b, column A. Make no adjustment for lottery winnings from other states. They are taxable by California. If you reduced gambling income for California lottery income, you may need to reduce the losses included in the federal itemized deductions on Part III, line 16, column A. Enter these losses on Part III, line 16, column B. c. Cancellation of Debt Mortgage forgiveness debt relief – California law does not conform to federal law regarding the exclusion of income from discharge of indebtedness from the disposition of your principal residence occurring after December 31, 2017. Enter the amount of discharge on line 8c, column C. Certain employer payments of student loans – California does not conform to the CARES Act regarding the exclusion of student loan payments made on behalf of an employee by an employer. Enter the amount of loan payment on line 8c, column C. Page 8  Schedule CA (540NR) Instructions  2023 Student loan discharged due to closure of a for-profit school – California law allows an income exclusion for income that would result from the discharge of any student loan of an eligible individual. An individual is eligible for the exclusion if any of the following apply during the taxable year. 1. The individual is granted a discharge of any student loan because: a. The individual successfully asserts that the school did something wrong or failed to do something that it should have done. b. The individual could not complete a program of study due to the school closing. 2. The individual attended a Brightwood College school on or before December 5, 2018, and is granted a discharge of any student loan made in connection with attending that school, and that discharge is not covered under item 1. 3. The individual attended a location of The Art Institute of California and is granted a discharge of any student loan made in connection with attending that school, and that discharge is not covered under item 1. Enter in column B the amount of this type of income if it was included on line 8c, column A, as income for federal purposes. d. Foreign Earned Income Exclusion from Federal Form 2555 Federal foreign earned income and housing exclusion – Enter in column C, as a positive number, the amount excluded from federal income on federal Schedule 1 (Form 1040), line 8d. Combat zone foreign earned income exclusion – Enter the amount excluded from federal income on line 8d, column C, as a positive number. e. Income from Federal Form 8853 Rollover from an Archer MSA to an HSA – Since California does not recognize HSAs, a rollover from an Archer MSA to an HSA is treated as distribution not used for qualified medical expenses. For California, the distribution is included in California taxable income and the additional 12.5% tax applies. For more information, get form FTB 3805P. Enter the amount rolled over from an Archer MSA to an HSA on line 8e, column C. MSA distribution used for menstrual care products – For Archer MSA purposes, California does not conform to the inclusion of amounts paid for menstrual care products as qualified medical expenses. Enter the amount of MSA distribution used to pay for menstrual care products on line 8e, column C. f. Income from Federal Form 8889 HSA distributions for unqualified medical expense – Distributions from an HSA not used for qualified medical expenses, and included in federal income, are not taxable for California purposes. Enter the distribution not used for qualified medical expenses on line 8f, column B. k. Stock Options Qualified equity grants – California law does not conform to federal law regarding the election to defer the recognition of income attributable to qualified stock. If you elected to defer income for federal purposes, make an adjustment on line 8k, column C. n. IRC Section 951(a) Inclusion – Under federal law, if you are a U.S. shareholder of a CFC, you must include IRC Section 951(a) amount in your income. California law does not conform. If you included the amount as income for federal purposes on line 8n, column A, enter the amount on line 8n, column B. o. IRC Section 951A(a) Inclusion – Under federal law, if you are a U.S. shareholder of a CFC, you must include your GILTI in your income. California law does not conform. If you included GILTI as income for federal purposes on line 8o, column A, enter the amount on line 8o, column B. p. IRC Section 461(l) Excess Business Loss Adjustment – For taxable years beginning after December 31, 2018, California law generally confo
Extracted from PDF file 2023-california-form-540-nr-schedule-ca.pdf, last modified November 2023

More about the California Form 540-NR Schedule CA Individual Income Tax Nonresident TY 2023

The instructions provided with California tax forms are a summary of California tax law and are only intended to aid taxpayers in preparing their state income tax returns. It includes information that is useful to the greatest number of taxpayers in the limited space available. It is not possible to include all requirements of the California Revenue and Taxation Code (R&TC) in the instructions. Taxpayers should not consider the instructions as authoritative law. Form 540-NR Schedule CA requires you to list multiple forms of income, such as wages, interest, or alimony .

We last updated the California Adjustments - Nonresidents and Part-Year Residents in January 2024, so this is the latest version of Form 540-NR Schedule CA, fully updated for tax year 2023. You can download or print current or past-year PDFs of Form 540-NR Schedule CA directly from TaxFormFinder. You can print other California tax forms here.


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Related California Individual Income Tax Forms:

TaxFormFinder has an additional 174 California income tax forms that you may need, plus all federal income tax forms. These related forms may also be needed with the California Form 540-NR Schedule CA.

Form Code Form Name
Form 540-NR Schedule CA INS Forms & Instructions for Schedule CA (540NR)
Form 540-NR California Nonresident or Part-Year Resident Income Tax Return
540-NR Tax Table Tax Table for 540-NR Tax Return
540-NR Schedule S Other State Tax Credit (Nonresidents)
Form 540-NR Schedule D California Capital Gain or Loss Adjustment
Form 540-NR Short California Nonresident or Part-Year Resident Income Tax Return (Short)
Form 540-NR Schedule P Alternative Minimum Tax and Credit Limitations - Nonresidents
540-NR INS 540-NR Nonresident or Part-Year Resident Booklet - Forms & Instructions

Download all CA tax forms View all 175 California Income Tax Forms


Form Sources:

California usually releases forms for the current tax year between January and April. We last updated California Form 540-NR Schedule CA from the Franchise Tax Board in January 2024.

Show Sources >

Form 540-NR Schedule CA is a California Individual Income Tax form. Many states have separate versions of their tax returns for nonresidents or part-year residents - that is, people who earn taxable income in that state live in a different state, or who live in the state for only a portion of the year. These nonresident returns allow taxpayers to specify which which income is subject to the state's taxes, and which is not.

About the Individual Income Tax

The IRS and most states collect a personal income tax, which is paid throughout the year via tax withholding or estimated income tax payments.

Most taxpayers are required to file a yearly income tax return in April to both the Internal Revenue Service and their state's revenue department, which will result in either a tax refund of excess withheld income or a tax payment if the withholding does not cover the taxpayer's entire liability. Every taxpayer's situation is different - please consult a CPA or licensed tax preparer to ensure that you are filing the correct tax forms!

Historical Past-Year Versions of California Form 540-NR Schedule CA

We have a total of thirteen past-year versions of Form 540-NR Schedule CA in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:


2023 Form 540-NR Schedule CA

2023 Instructions for Schedule CA (540NR) California Adjustments - Nonresidents or Part-Year Residents

2022 Form 540-NR Schedule CA

2022 Instructions for Schedule CA (540)

2021 Form 540-NR Schedule CA

2021 Schedule CA (540NR) California Adjustments - Nonresidents or Part-Year Residents

2020 Form 540-NR Schedule CA

2020 Schedule CA (540NR) California Adjustments - Nonresidents or Part-Year Residents

2019 Form 540-NR Schedule CA

2019 Schedule CA (540NR) California Adjustments - Nonresidents or Part-Year Residents

2017 Form 540-NR Schedule CA

2017 Schedule CA (540NR) California Adjustments - Nonresidents or Part-Year Residents

2016 Form 540-NR Schedule CA

2016 Schedule CA 540NR California Adjustments - Nonresidents or Part-Year Residents

California Adjustments - Nonresidents and Part-Year Residents 2015 Form 540-NR Schedule CA

2015 Schedule CA (540NR) -- California Adjustments — Nonresidents or Part-Year Residents

California Adjustments - Nonresidents and Part-Year Residents 2014 Form 540-NR Schedule CA

2014 Schedule CA (540NR) -- California Adjustments — Nonresidents or Part-Year Residents

California Adjustments - Nonresidents and Part-Year Residents (Fill-in & Save) 2013 Form 540-NR Schedule CA

2013 Schedule CA (540NR) -- California Adjustments — Nonresidents or Part-Year Residents

2012 Form 540-NR Schedule CA

2012 Schedule CA (540NR) -- California Adjustments — Nonresidents or Part-Year Residents

2011 California Schedule CA (540NR) 2011 Form 540-NR Schedule CA

2011 Schedule CA (540NR) -- California Adjustments — Nonresidents or Part-Year Residents


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