Question

California adjusted gross income for taxpayer who is (55) and has federal adjusted gross income of $60,000.
• California Lottery winnings – $1,000.
• California municipal bond interest – $200.
• Educator expenses – $300.
• New York municipal bond interest – $300.
• Traditional IRA contribution – $3,000.
• U.S. Savings Bond interest – $150.

Answer 1

California starts with federal AGI ($60,000) and then makes California-specific additions/subtractions.

Treatments:
- California lottery winnings ($1,000) — taxable by CA as well, so no adjustment.
- California municipal bond interest ($200) — tax-exempt for both federal and CA, so no adjustment.
- Educator expenses ($300) — treated as a federal adjustment that California does not allow, so add back +$300.
- New York municipal bond interest ($300) — tax-exempt federally but taxable by CA, so add back +$300.
- Traditional IRA contribution ($3,000) — assumed deductible for federal but disallowed by CA here, so add back +$3,000.
- U.S. savings bond interest ($150) — interest on U.S. obligations is exempt from CA tax, so subtract −$150.

Calculation:
Start: 60,000
Add: NY muni 300
Add: educator expense 300
Add: IRA contribution 3,000
Less: US savings bond interest 150

CA AGI = 60,000 + 300 + 300 + 3,000 − 150 = 63,450

California AGI = $63,450.

(Notes: I assumed the IRA and educator deductions reduced federal AGI and are disallowed for California. If your situation/year has different conformity rules for IRA/educator deductions, the result could differ.)