Difference in IRA basis between federal and California

Forum|Forum|4 years ago
February 28, 2022
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Where do I input the basis of my IRA for my California return.

The federal basis and the CA basis are different amounts.

I've entered the federal basis but cannot find any place in the California section to either adjust the federal basis or to input the actual CA basis amount.

TurboTax Home & Biz Windows

DaveF1006

To clarify, what form and line number does your basis for your California return appear?

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kimperson1Author

Hi Dave, I'm new at TT, have used Lacerte for the last 30+ years, so I hope this response gets to you. Federal Form 8606, Part I, Line 2 shows your basis in federal traditional IRA's. Now while this amount is only important when you take an IRA distribution, you do need to keep track of the basis because it can increase every year if you make non-deductible contributions to your traditional IRA. Way back when, CA had a max IRA deduction allowed of $1,500 while the fed had a max IRA deduction of $2,000. So many Californians have basis in their IRA's. So when you take distributions you will have part of the distribution be non-taxable; but the fed and CA non-taxable portions will be different. CA does not have a form that mimics the federal F8606, Lacerte just uses F8606 in the CA return and the label at the top of the form says "California Form 8606". So I need to find a place to input what the CA basis in the IRA is so that this amount carries forward every year until distributions begin, or find a place to adjust the federal IRA basis on the CA return.

DaveF1006

Yes, there is no form for Ca that the mimics the 8606 to record your non-deductible contributions to Ca. The reason for this is that those contributions are tracked in an 8606 on the federal side thus determines how much of a distribution is taxable. Once the distribution is deemed taxable on the federal side, the same amount is taxable to the state. The State of California fully conforms to federal filing thus has no need for a separate form in Ca to track non-deductible contributions.

If there was a non-conformity issue, then the state would have a form to track non-deductible contributions.

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