Entering in CA source income from an S-Corp K-1

Forum|Forum|12 days ago
June 20, 2026
3 replies
74 views

Hi all!

I’m pretty stumped on this question, and I was hoping y’all could help me navigate it:

My is a California resident and a shareholder in a multiple person S-Corp based in Montana. On the federal K-1 issued by the S-Corp, the Ordinary Business Income amount (i.e. box 1) is $53,114. On the the California K-1 issued, I have four boxes with figures for Ordinary Business Income:

Box b (amount from federal k-1): $53,114
Box c (California adjustments) $315
Box d (total amounts using California law): $53,429
Box e (California source amounts and credits): $14,548

My question is, when inputting the source amounts in Proconnect, what should I use for CA Source Income? Should I be inputting “box e: California source amounts and credits” as California source income? Or do I report “Box d: total amounts using California law” (or maybe it’s a different amount?)? I’m under the impression that I should be reporting the “box d” amount, since my client is a California resident and I believe CA taxes on total income, not just CA source income, but thats where my confusion is.

Further, The S-Corp Federal and California basis worksheet more-or-less match (very close), which leads me to believe that box d is correct , but I don’t know if thats right.

Thank you for your help!

Cortese

Best answer by IRonMaN

Sounds like you just report the full K-1 amount on the federal and let it flow to CA since the client is a CA resident but you would have a $315 adjustment show up on CA. You don’t say if the rest of the income is MT based which would probably require filing in that state or possibly others depending on where the rest of the income was generated.

IRonMaNAnswer

Level 15

Sounds like you just report the full K-1 amount on the federal and let it flow to CA since the client is a CA resident but you would have a $315 adjustment show up on CA. You don’t say if the rest of the income is MT based which would probably require filing in that state or possibly others depending on where the rest of the income was generated.

Slava Ukraini!

George4Tacks

Level 15

I would input this way

The 3rd column for source would look like this

This should then generate a CA Schedule S for a credit for the tax paid on dual income in both states.

Answers are easy. Questions are hard!

D

DomFromWashingtonAuthor

Level 2

@George4Tacks @IRonMaN Thank you both for your reply’s! I confirmed with a CA FTB employee that the correct amount to report is “box d” (i.e. the full amount with the California adjustments) 👍🏼

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