Changes to 2010 Forms
Updates to the 3809 Booklet on 01/20/2011—Targeted Tax Area Business Booklet
We replaced text on the 3809 Booklet on page 15, column 3, Section C - Computation of NOL Carryover and Carryover Limitations - Individuals, Exempt Trusts, and Corporations, paragraph 3.
Individuals use your adjusted gross income modified for California law without regard to your NOL deduction (Forms 540/540NR, Line 17 plus the NOL deduction listed on Schedule CA (540/540NR) Column B, lines 21d and 21e) to determine modified adjusted gross income.
Individuals use the amount shown on your federal tax return for the same taxable year without regard to the federal NOL deduction (540/540NR, Line 13, plus the federal NOL deduction listed on Schedule CA (540/540NR) column C, line 21c).
Reason for the changes
The definition for modified AGI was changed from using CA AGI to using the federal AGI.
Tax liability could either increase or decrease depending on the CA adjustments.