Independent contractor {CA}

Forum|Forum|4 years ago
March 1, 2022
1 reply
5 views

When is it appropriate to check the box found in the Schedule C General Information tab? When I do this it creates a Sch CA adjustment to remove the Schedule C income for CA.

Thanks in advance

Mark

ProConnect Tax

This topic has been closed for replies.

Best answer by BeckCPA08

I also had this question and noted the same change in Sch CA adjustment column when I checked it.

I ended up reviewing the Instructions for Schedule CA (540) online and it appears this adjustment is only applicable when “Some individuals may be classified as independent contractors for federal purposes and employees for California purposes” (https://www.ftb.ca.gov/forms/2022/2022-540-ca-instructions.html#Specific-Line-Instructions).

I had to also review the CA definition of IC vs. Employee under AB 5.

Seems the checkbox should actually say “Employee? {CA}” since you only make the adjustments when they are employees for California but independent contractors for federal.

B

BeckCPA08Answer

Level 2

I also had this question and noted the same change in Sch CA adjustment column when I checked it.

I ended up reviewing the Instructions for Schedule CA (540) online and it appears this adjustment is only applicable when “Some individuals may be classified as independent contractors for federal purposes and employees for California purposes” (https://www.ftb.ca.gov/forms/2022/2022-540-ca-instructions.html#Specific-Line-Instructions).

I had to also review the CA definition of IC vs. Employee under AB 5.

Seems the checkbox should actually say “Employee? {CA}” since you only make the adjustments when they are employees for California but independent contractors for federal.

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