California vs Federal

This Self-Study course is designed for Tax Professionals, including tax return preparers, Annual Filing Season Program (AFSP) participants, Enrolled Agents (EAs), Certified Public Accountants (CPAs), accountants, and other professionals who prepare or review California individual income tax returns.

This course does not include video lessons. Training is completed through independent study of the course materials followed by a final exam.

After reviewing the course materials and successfully passing the final exam, participants receive IRS CE/CTEC credit in their account.

The course focuses on the key differences between federal and California tax law and provides a practical understanding of how California’s tax system interacts with, but does not always conform to, the Internal Revenue Code. You will learn why changes in federal tax law do not automatically apply in California, how federal and state conformity rules affect tax return preparation, and what Tax Professionals should review when new federal tax legislation is enacted.

You will examine how specific types of income, deductions, and tax credits may be treated differently by the IRS and the California Franchise Tax Board (FTB). Topics include tips, overtime compensation, long-term capital gains, tax-exempt interest, HSA earnings, alimony, the Foreign Earned Income Exclusion, dividends, unemployment compensation, Social Security benefits, cryptocurrency income, and Schedule K-1 income.

Special attention is given to differences in deductions and adjustments, including the Standard Deduction, Itemized Deductions, Health Savings Accounts (HSAs), Bonus Depreciation, the Section 179 Deduction, and rental losses. You will also learn to distinguish between temporary and permanent federal-California tax differences and understand how those differences may affect current and future tax returns.

The course also compares major federal and California tax credits, including the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), Young Child Tax Credit (YCTC), Child and Dependent Care Credit, education credits, credits for taxes paid to another state, and the California Renter’s Credit. You will learn why eligibility for a federal tax credit does not necessarily mean that the same credit or tax treatment is available on the California return.

Finally, the course provides a practical step-by-step process for reviewing differences between federal and California tax returns. You will learn how to identify adjustments that require additional attention, recognize common preparation errors, reduce the risk of IRS-FTB mismatches and notices, and document federal-to-state differences in a tax firm’s internal workpapers. The course will help you develop a systematic approach to California tax return preparation, recognize areas where California law departs from federal tax treatment, and more accurately review state adjustments before filing.