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State of California Franchise Tax Board

Changes to 2001 Forms

2001 Updates to Schedule CA (540)

Revision Date: 09/17/2004

Revision Details: Schedule CA (540) - California Adjustments - Residents Instructions

The Internet version of the schedule has been revised. These revisions are due to the California Legislature enacting SB615 (Stats. 2004, CH. 388), which makes California Law compatible with the Servicemembers Civil Relief Act (Public Law 108-189).

This means that servicemembers domiciled outside of California and their spouses may exclude the member's military compensation from gross income when computing the tax rate on nonmilitary income.

The revision is required on the stand alone Schedule CA (540) Instructions, Page 1; Form 540 Booklet, Schedule CA(540) Instructions, Page 45; Package X, Page 271.

  • A new title has been added above "General Information" in the instructions. In addition, new paragraphs have been added underneath the title.

It should read:

What's Changed?

Requirements for military servicemembers domiciled in California remain unchanged. Military servicemembers domiciled in California must include their military compensation in total income. In addition, they must include their military compensation in California source income when stationed in California. However, military compensation is not California source income when a servicemembers is permanently stationed outside of California.

Amended Returns. The new laws permit servicemembers domiciled outside of California, who included military compensation in income from all sources; to amend certain previously filed returns. To determine which years may be amended, see FTB Pub.1001, Supplemental Guidelines to California Adjustments and FTB Pub.1032, Tax Information for Military Personnel.

For servicemembers who are American Indian tribal members treated as living in Indian country, see FTB 674, Frequently Asked Questions About the Income Taxation of American Indians.

Back to Tax Form Changes for 2001

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