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Changes to 2010 Forms

Updates to the Schedule CA (540NR) Instructions on 04/14/2011—Instructions for 540 Schedule CA, California Adjustments - Residents

We updated text on the Schedule CA (540) on:

  1. Page 2, Column 1 (and in the 540/540A Booklet on Page 44, Column 1)
  2. Page 5, Column 1 (and in the 540/540A Booklet on Page 41, Column 1)
  3. Page 5, Column 2 (and in the 540/540A Booklet on Page 47, Column 2)
  4. Page 7, Column 2 (and in the 540/540A Booklet on Page 49, Column 2)

Previous Version

  1. Adult children not qualified for tax-free medical coverage. If you have medical coverage deduction through your employer and it includes your adult children not qualified for tax-free medical coverage, your employer should impute additional income for California on your federal Form W-2. Enter the imputed income on line 7, column C.

  2. Added text

  3. Line 29 (Self-Employed Health Insurance Deduction) – If you have a health insurance deduction that includes your adult children not qualified for tax‑free medical coverage for California, enter the adult child’s portion of the insurance cost on line 29, column B.

  4. Adult Children Health Insurance Deduction – Federal law allows health insurance paid for adult children under age 27 that exceed 7.5% of federal AGI as an itemized deduction. For California, adult children who provide more than one-half of their own financial support in the year are not qualified for the health insurance deduction. If your federal medical expense deduction includes a health insurance deduction for your adult children and your adult children provide more than one-half of their own financial support in the year, you must adjust your medical deduction for California.

    • Calculate the medical expense deduction for California by excluding the health insurance paid for your non qualified adult children.
    • Subtract the California amount from the federal amount. Enter the difference on line 41, as a negative amount.

Revised Version

  1. Note: text deleted

  2. San Bruno Gas Explosion

    Enter in column B the amount of disaster relief payments, used for reimbursements, included in the federal amount on line 21, column A.

  3. Note: text deleted

  4. Note: text deleted

Reason for the changes

California law conforms to federal law regarding the Medical Care Expenses Exclusion/Deduction for Children under 27 with the enactment of AB36. AB 50 was enacted which allows the exclusion of disaster relief payments, used for reimbursements, from taxable income.

Impact

Lower tax liability.

Back to Tax Form Changes for 2010