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Changes to 2006 Form

2006 Updates to Schedule CA (540)

Revision Date: 04/19/2007

Revision Details: Side 1, 2006 Schedule CA (540) Flat; page 37, 2006 Resident Booklet; Page 258, Package X.

This revision is required to be in compliance with the Federal Privacy Act.

The Disclosure Section ensures the department is in compliance with the Information Practices Act of 1977. State agencies must provide a notice with forms that request personal information from individual taxpayer.

The Privacy Notice, FTB Form 1131, must:

  • Include name and division of agency requesting the information.
  • Include authority for requesting the information.
  • State whether information is voluntary or mandatory.
  • State consequences for providing the information.

Our forms must also meet the Federal Privacy Act if we request social security numbers from individuals.

  • Schedule CA (540), Side 1, bottom left:

It should read:

For Privacy Notice, get form FTB 1131.

This change does not impact tax liability.
The revised internet version is available for download.


2006 Updates to Schedule CA (540)

Revision Date: 03/21/2007

Revision Details: Schedule CA (540) instructions

  • Side 2, Schedule CA (540) flat; 2006 Resident booklet, page 38; and page 259 of the Package X.

VPDI is not deductible as an itemized deduction for federal. Rev. Rul. 81-194 holds that employee contributions to voluntary disability plans (VPDI) are not itemized deductions. Therefore we do not need to adjust federal itemized deductions by VPDI.

It should read:

Enter the total of federal Schedule A (Form 1040), line 5 (State Disability Insurance and state and local income tax, or General Sales Tax) and line 8 (foreign taxes only). See instructions.

This change does not impact tax liability. It makes an assumption that VPDI is being deducted on 1040 Sch A as a tax. It is not on the 1040 Sch A because it's not deductible on the federal return.

The revised internet version is available for download.


2006 Updates to Schedule CA (540) Instructions

Revision Date: 03/05/07

Revision Details: In 2004 the following information was in the instructions for the Schedule CA.

  • Page 5, First column, Eleventh paragraph

2004 Vehicle License Fee (VLF) Refund: If you paid a VLF and included the fee in itemized deductions in 2003, the VLF refund received in 2004 is treated as a recovery of the amount you deducted as am itemized deduction. Generally, the amount of the refund is included in income in the year received and taxed the same by the federal and California. If the taxable amount is smaller for California than federal, enter the difference in column B, line 21f. If the taxable amount is larger for Califonria than federal, enter the difference in column C, line 21f. For additional information, get FTB Pub. 1001, Supplemental Guidelines to California Adjustments.
Caution: If you itemized for California in 2003 and used the standard deduction for federal, report the taxable portion of the refund in column C, line 21f. If you itemized for federal and used the standard deduction for California, the refund is not taxable for California. Enter the amount of the refund included in federal income in column B, line 21f.

2004 Vehicle License Fee (VLF) Refund: During 2003 the VLF increased for a short time. Some taxpayers paid the higher registration fee to DMV and deducted the amount as an itemized deduction.

The Vehicle license FEE Refund paragraph was inadvertently left in the instructions. Therefore in 2005 and 2006 this information appeared under Grants paid to low-income individuals. The caution paragraph is no longer applicable.

This revision does not have a tax impact. This revision needs to be noted in printed products 2006 Schedule CA (540) flat, page 5; 2006 Form 540/540A Booklet, page 54; and 2006 Package X, page 264.

The revised internet version is available for download.


2006 Updates to 540 Booklet - Resident Booklet Credit Chart

Revision Date: 03/05/07

Revision Details: Enhanced Oil Recovery credit, was inadvertently placed under the repealed credits. Nonresident credit chart is correct.

  • Page 58, Enhanced Oil Recovery should show under the title Employer Child Care Program-FTB 3501

This revision does not have a tax impact. This revision needs to be noted in printed products 2006 Form 540/540A Booklet, page 58, and 2006 Package X, page 238.

The revised internet version is available for download.


2006 Updates to 540 Booklet - Nonrefundable Renter's Credit

Revision Date: 02/08/07

Revision Details: Incorrect web address provided on the Nonrefundable Renter's Credit Qualification Record located in the Resident Booklet.

  • Page 57 of the Resident Booklet:

It should read:

e-file and skip this page! The software you use to e-file will help you find out if you qualify for this credit and will figure the correct amount of the credit automatically. Go to our Website at www.ftb.ca.gov to check your e-file options.

This revision does not have a tax impact.
This revision needs to be noted in printed products 2006 Resident Booklet, page 57 and 2006 Package X, page 221.

The revised internet version is available for download.


2006 Updates to Schedule CA (540)

Revision Date: 02/08/07

Revision Details: Schedule CA (540) instructions

This revision is being made in order to have tax information flow in a logical manner and be less confusing for the taxpayer. The instructions currently are not in logical order. By revising the instructions we will group the instructions for the Student Loan Interest deduction together and we will group all of the line 35 instructions together. (Domestic production activities deduction and Tuition Fees).

  • Page 5, bottom of column 2:

It should read:

  • Line 33 (Student Loan Interest Deduction) - California conforms to federal law regarding student loan interest deduction except for a spouse of a non California domiciled military taxpayer residing in a community property state. Use the Student Loan Interest Deduction Worksheet below to compute the amount to enter on line 33. See FTB Pub. 1032,Tax Information for Military Personnel for more information.
  • Page 6, top of column 1:

It should read:

  • Line 35 (Domestic production activities deduction) - California does not conform to the federal law regarding the Domestic production activities deduction. If you made an adjustment on your federal return for Domestic production activities, enter that amount in column B.

Federal law allows a deduction for Tuition Fees and Domestic Production Activities. California does not conform to these deductions. The amount claimed as Tuition Fees Deduction for federal purposes should be entered on line 35, column B, with the notation "Tuition and Fees Deduction". If entries in column B are required for both "Domestic Production Activities Deduction" and "Tuition Fees Deduction" add a statement in the space provided below line 35 showing the break down for each adjustment.

The revised internet version is available for download.


2006 Updates to Schedule CA (540)

Revision Date: 01/18/07

Revision Details: Schedule CA (540) and instructions

Add additional language to inform taxpayers where to go to get additional information regarding the reporting requirements for interest income, dividend income and capital gains for children between the ages of 14 and 18.

  • Page 2, first column, line 8, interest income instructions and second column, line 9 dividend income add the following language:

(For more information, get FTB Pub. 1001, Supplemental Guidelines to California Adjustments)

  • Page 3, second column, line 13, capital gain instructions, last sentence add new bulleted item:

Capital gain distribution for children between the ages of 14 and 18.

These revisions do not have a tax impact. These revision need to be noted in printed products 2006 Schedule CA (540) flat pages 2 and 3; 2006 Resident Booklet pages 51 and 52; 2006 Package X pages 261 and 262.

The revised internet version is available for download.


2006 Updates to Schedule CA (540)

Revision Date: 12/29/06

Revision Details: Schedule CA (540) and instructions

President Bush signed Tax Relief and Health Care Act which extended the federal deductions for "Educator expense", "Tuition and Fees Deduction", and "Sales Tax Deduction." California does not conform to the Educator expense and Tuition and Fees Deductions. Therefore an adjustment needs to be made on the Schedule CA (540). California does include in line 39 either local general sales and use taxes or state and local income taxes.

  • Schedule CA (540), Side 1, line 23, column B: remove shading; Instructions for Line 23 (Educator Expense), Page 5 (page 54 of the Resident Booklet)

It should read:

Federal law allows a deduction for Educator Expense. California does not conform to this deduction. The amount claimed as Educator Expense for federal purposes should be entered on line 23, column B, with the notation "Educator Expense".

  • Include this additional language on Page 6 (Page 55 of the Resident Booklet):

Federal law allows a deduction for Tuition Fees and Domestic Production Activities. California does not conform to these deductions. The amount claimed as Tuition Fees Deduction for federal purposes should be entered on line 35, column, B, with the notation "Tuition and Fees Deduction". If entries in column B are required for both "Domestic Production Activities Deduction" and "Tuition Fees Deduction" add a statement in the space provided below line 35 showing the break down for each adjustment.

  • Include this additional language on Page 6 (Page 55 of the Resident Booklet):

If you are deducting either local general sales and use taxes or state and local income taxes as an itemized deduction on federal Schedule A, line 5, enter the amount on Schedule CA (540), line 39.

These revisions have tax impact. These revisions need to be noted in the printed products 2006 Schedule CA (540) flat, page 5 and 6; 2006 Resident Booklet pages 37, 54 & 55; and Package X pages 258, 265 and 266.

The revised internet version is available for download.

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