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I am filling a 540NR form for 2014, for California. Line 33 says:

"CA Standard Deduction Percentage Divide line 32 by line 17. If more than 1, enter 1.0000"

Line 32 is the CA adjusted gross income, and is $8,521. Line 17 is equal in my case to line 13 and is the federal adjusted gross income. For me, it's $0. I get it from my 1040NR-EZ form, and it is because all of my income is under "Total income exempt by a treaty from page 2, Item J(1)(e)" (line 6 in 1040NR-EZ for 2014).

Obviously I have a mathematical problem since I can't divide $8,521 by 0. What should I write?

Also, does that mean there is a conceptual problem with submitting this form? I have state taxes reduced in 2014 and I believe I should get a refund.

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    Write in Floating point exception (core dumped) and leave the rest of the form blank 8-) – Nate Eldredge Oct 28 '16 at 16:43
  • If possible, I would probably leave that field blank (don't even write 0) and write in a comment field "line 17 is $0" or something like that. Or call (in your case) the IRS and ask. – a CVn Oct 28 '16 at 17:10
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    You are using the 540NR Short Form; I think you must use the 540NR Long Form instead, because you have adjustments to income (you need to add back the income exempted by a tax treaty since California doesn't recognize tax treaties) that are not supported by the Short Form. – user102008 Oct 28 '16 at 19:54
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    Also, why are you using 540NR at all? Did you only live part of the year in California? If you lived the whole year in California, then you are a California resident and should just use 540. – user102008 Oct 28 '16 at 19:55
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    Another thing is that your income level, about $8521, is so low that you don't have to file a California tax return. Check the "Do I Have To File?" section at the beginning of the form tax booklet, to see the threshold that applies to you. But your income level seems to be below the threshold in pretty much every case. So unless you have California withheld tax that you want to get back, you probably don't have to file. – user102008 Oct 28 '16 at 19:57
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The answer indeed seems to be that I should not file the 540NR short form. Instead, I should file the Schedule CA 540NR form and the 540NR long form.

I found it hard to understand the instructions for 1040NR-EZ: This link seems informative (use at own risk).

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We can approximate the limit as x approaches 0 for 8,521/x as infinity, and since infinity is greater than 1, you would enter 1.0000.

Math aside, the form appears to be set up to pro-rate your standard deduction if you earn taxable income outside the state of CA. Since your Federal AGI is $0 I believe it would be correct to enter 1.0000 on line 33 for the full deduction.

Of course, you should really talk to a tax professional or call the IRS to be certain.

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    Is it infinity, or minus infinity? It depends on whether you approach 0 from the left or right. Is the federal AGI infinitesimally positive, or infinitesimally negative? – Nate Eldredge Oct 28 '16 at 18:32
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    @NateEldredge: It seems it would have to be infinitesimally positive, since it was reduced by an exemption from some original income amount that was positive, and you can't generally get a tax refund by reducing/exempting your income below zero. – BrenBarn Oct 30 '16 at 20:51

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