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State of California Franchise Tax Board

FTB Warns Taxpayers of Error on State Tax Form

Californians Encouraged to File Electronically or Request Corrected Forms

Released: January 15, 2008

An error on a printed California tax form may lead some California taxpayers who file paper returns to understate their home mortgage interest deductions, the Franchise Tax Board (FTB) announced Tuesday. The error is on early versions of Schedule CA (540), California Adjustments, which is used to make adjustments to federal adjusted gross income and claim federal itemized deductions.

Line 38 of the Schedule CA form incorrectly states: “Enter the total amount of itemized deductions from your federal form 1040, Schedule A, lines 4, 9, 13, 19, 20, 27, and 28.” It should have listed line number 15 instead of 13. This error could lead taxpayers to miss claiming their home mortgage interest, points, qualified mortgage insurance premiums, and investment interest. However, the instructions in the California 540 & 540A tax booklet are correct.

The FTB in December mailed 1.1 million California 540 & 540A booklets to taxpayers, and another 1.3 million were sent to public distribution sites including libraries, post offices, and FTB district offices.

Taxpayers who want a corrected form may download it from the FTB's Website, call the FTB at (800) 852-5711 to request one, or later this month the corrected forms will be available at public distribution sites. Taxpayers may also use CalFile, or any of the approved electronic filing products listed on the FTB's Website.

The FTB encourages taxpayers who already have filed a paper tax return and followed the incorrect line numbers to call (800) 852-5711 to have their returns corrected.

The FTB will correct any overstated tax liability that results from the error and will notify affected taxpayers. The FTB updated its online forms and notified tax software developers when the error was discovered in December. But tax booklets were already in the distribution process and could not be recalled or corrected.

The FTB expects slightly more than 1 percent of the 15 million personal income tax returns projected to be filed this year will be affected by the error. Visit the FTB's Website to find tax forms, answers to frequently asked questions, e-file, CalFile, and other information.

IRS Schedule A - Itemized Deductions and other federal tax information can be found on the IRS Website.

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