Question

interest on us savings bond and treasury obligation goes on which line on the form 540 or schedule ca 540 or should be put on the california return

Answer 1

Interest on U.S. Treasury obligations (including U.S. savings bonds) is exempt from California personal income tax. How you report it:

- Report the interest on your federal return (Form 1040 / Schedule B if required).
- On the California return, you do not put it directly on the main Form 540 lines. Instead complete Schedule CA (540) — Part I (Income) and use the row for interest/taxable interest. Enter the U.S. obligation interest as a subtraction (the “subtractions from federal income” column) so it is removed from your California income.
- Note: If you already excluded the bond interest on your federal return (for example, an education exclusion), then it is not in your federal AGI and you generally will not enter a subtraction on Schedule CA.

If you want, tell me which tax year you’re filing and I’ll give the exact line/column numbers for that year’s Schedule CA (540).