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Category: California

California Subtractions from Income

California Lottery Winnings - California excludes California lottery winnings from taxable income. Enter as a Subtraction from Income, the amount of California lottery winnings included in the federal amount on line 21 in column A.

Note: Make no adjustment for lottery winnings from other states. They are taxable by California. California and federal laws allow gambling losses only to the extent of reported gambling income. If you reduced gambling income for California lottery income, you may need to reduce the losses included in the federal itemized deductions.


Reward from a Crime Hotline - Enter the amount of the reward authorized by a government agency received from a crime hotline established by a government agency or nonprofit organization and to the extent it was included on your Federal Return as income. You may not make this adjustment if you are an employee of the hotline or someone who sponsors rewards for the hotline.


Beverage Container Recycling Income - Enter the amount of income from recycling to the extent it was included on your Federal Return as income.


Rebates or vouchers from a local water agency, energy agency or energy supplier - California law allows an income exclusion for rebates or vouchers from a local water agency, energy agency, or energy supplier for the purchase or installation of water conservation appliances and devices to the extent it was included on your Federal Return as income.


Original Issue Discount (OID)for debt instruments issued in 1985 and 1986 - In the year of sale or other disposition, you must recognize the difference between the amount reported on your federal return and amount reported for California purpose.

OID Holders: Enter the difference between the amount included in Federal Gross Income and the amount included for California purposes as Addition to Income.
OID Issuers: Enter the difference between the federal deductible amount and the California Deductible amount as a Subtraction to Income.


Foreign Income of Non Resident Aliens - Adjust federal income to reflect worldwide income computed under California Law. Enter losses from foreign sources as a Subtraction to Income. Enter foreign source income as Addition to Income

Cost-share payments received by forest landowners - Enter the cost-share payments received from the Department of Forestry and Fire Protection under the California Forest Improvement Act of 1978 or from the United States Department of Agriculture, Forest Service, under the Forest Stewardship Program and the Stewardship Incentives Program, pursuant to the Cooperative Forestry Assistance Act.


Compensation for False Imprisonment - California excludes compensation for false imprisonment from income. Enter the amount of compensation as Subtraction from Income.


Grants paid to low-income individuals - California excludes grants paid to low-income individuals to construct or retrofit buildings to make them more energy efficient. Federal has no similar exclusion. Enter this type of income as Subtraction from Income.


Health Savings Account (HSA) Distributions for unqualified medical expense - Distributions from a 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 as Subtraction from income.


California National Guard Surviving Spouse & Children Relief Act of 2004 - Death benefits received from the State of California by a surviving spouse/RDP (Registered Domestic Partner) or member-designated beneficiary of certain military personnel killed in the performance of duty is excluded from gross income. Military personnel include the California National Guard, State Military Reserve, or the Naval Militia. Enter the death benefit as a Subtraction from Income to the extent it was included on your Federal Return.


Ottoman Turkish Empire Settlement Payments - If you received settlement payments as a person persecuted by the regime that was in control of the Ottoman Turkish Empire from 1915 until 1923 your gross income does not include those excludable settlement payments, or interest, received by you, your heirs, or your estate for payments received on or after January 1, 2005. Enter the amount of settlement payments to the extent it was included in your Federal Income.

For further information on these items Sched CA.