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I'm a bit baffled looking at the Schedule CA 540 form in its Part I Section A set of rows. There's the rows that form the matrix against the various major columns A, B and C, but there's also this set of little columns a vs b that I outlined in red in the photo below. I don't see any reference to the a values in the instructions at all https://www.ftb.ca.gov/forms/2021/2021-540-ca-instructions.html

What role do these fields even play in the form?

Page 1 Schedule CA 540

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These correspond to the places on the federal tax return 1040 form that have a separate "a" line to the left of the main "b" line. If you look at the federal 1040 form, you will see that lines 2-7 all have an "a" and "b" part. Whatever you put on the "a" and "b" line values on your federal tax return, you are supposed to copy the values exactly to the same-numbered line on your California 540 Schedule CA.

Form 1040 page 1 annotating the source of the correspondence

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  • Indeed, I gotta always remember the state form is a derivative of the federal form and will keep in mind looking to it for reference in the future instead of expecting the state instructions to be fully self contained. Now I see it clearly, the little a column are the tax exempt half and the b column the taxable stuff.
    – jxramos
    Apr 18, 2022 at 8:15
  • @jxramos: For line 2, yes, a is tax-exempt and b is taxable. For line 3, a (qualified dividends) is a subset of b (ordinary dividends). For line 4, b (taxable) is a subset of a total distributions. Each line has its own meanings.
    – user102008
    Apr 18, 2022 at 17:15
  • Oh yah I made a mental oversimplification on qualified dividends, they were always synonymous to me with the not taxable half, but that's actually contingent on income bracket. The tax rate on qualified dividends is 0%, 15% or 20%, depending on your taxable income and filing status. The tax rate on nonqualified dividends is the same as your regular income tax bracket.
    – jxramos
    Apr 18, 2022 at 17:45

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