Schedule CA (540) - adjusting for Treasury MMF (VUSXX)

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Topic Author
ishkadetto
Posts: 63
Joined: Thu May 24, 2018 2:49 pm
Location: California, USA

Schedule CA (540) - adjusting for Treasury MMF (VUSXX)

Post by ishkadetto »

I just got finished doing my taxes using online software. Federally, it all seems to be just fine. My question is, when I get to the California part...It's probably just the software, but I can't figure out how to adjust for VUSXX and VMFXX dividend income on the state taxes. I may try to file using CalFile or do a manual paper return for the first time if I can't figure out how to get this Express1040 to work. Either way, I want to know how to correctly file so I can make sure my final return is correct.

*I received ~$500 in dividends from VUSXX (Vanguard Treasury Money Market Fund). It had 100% income from U.S. government obligations, so all of it should be state-tax free.
*I received ~$20 in dividends from VMFXX (Vanguard Federal Money Market Fund). It had 77.79% income from U.S. government obligations,which meets to 50% threshold requirement for CA, so ~$16 of it should be state-tax free.
*I received ~$40 in dividends from VCTXX (Vanguard CA Municipal Money Market Fund). It's a CA state muni fund so should be totally tax-free. This one seems to not be a problem with the software because its all “exempt-interest dividends” on Form 1099-DIV and shows up again on Line 2a Tax-exempt interest of the Federal 1040.

So I think I need to use Schedule CA 540 (https://www.ftb.ca.gov/forms/2018/18_540ca.pdf)?

The instructions (https://www.ftb.ca.gov/forms/2018/18_540cains.pdf) aren't helping me much. "Line 3 – Ordinary Dividends" talks about adding back in things but not subtracting. The "Line 2 – Taxable Interest" seems a little more pertinent, but technically I received 'dividends' not 'interest' so I feel like that isn't right either.

Any direction is appreciated! :)
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HueyLD
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Re: Schedule CA (540) - adjusting for Treasury MMF (VUSXX)

Post by HueyLD »

Which tax software do you use?

In TurboTax, there is a box directly beneath the 1099-DIV ordinary dividends box that asks you for the amount of treasury dividends. If you enter an amount there, it will be substracted on your state tax return.
Topic Author
ishkadetto
Posts: 63
Joined: Thu May 24, 2018 2:49 pm
Location: California, USA

Re: Schedule CA (540) - adjusting for Treasury MMF (VUSXX)

Post by ishkadetto »

HueyLD wrote: Tue Feb 19, 2019 3:27 pm Which tax software do you use?

In TurboTax, there is a box directly beneath the 1099-DIV ordinary dividends box that asks you for the amount of treasury dividends. If you enter an amount there, it will be substracted on your state tax return.
Thank you for your reply! I am using Express1040, I think similar to other web-based software. I'd still like to know how to fill out Schedule CA 540 ( if that's what I'm supposed to do), for general knowledge.
Topic Author
ishkadetto
Posts: 63
Joined: Thu May 24, 2018 2:49 pm
Location: California, USA

Re: Schedule CA (540) - adjusting for Treasury MMF (VUSXX)

Post by ishkadetto »

HueyLD wrote: Tue Feb 19, 2019 3:27 pm In TurboTax, there is a box directly beneath the 1099-DIV ordinary dividends box that asks you for the amount of treasury dividends. If you enter an amount there, it will be substracted on your state tax return.
Your reply did prompt me to go back one more time, and I DID find where it asks "Is this a mutual fund that has U.S. Government interest income?" which I somehow did not see previously despite going over it 10 times! Oh my tired eyes! :oops:

Thank you :)
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