Line 8 – Other Income

a. Federal Net Operating Loss – Enter the amount of the federal NOL included on line 8a, column A, as a positive number in column C. Get form FTB 3805V to figure the allowable California NOL.

b. Gambling

California lottery winnings – California excludes California lottery winnings from taxable income. Enter in column B the amount of California lottery winnings included in the federal amount on line 8b, column A.

Make no adjustment for lottery winnings from other states. They are taxable by California. If you reduced gambling income for California lottery income, you may need to reduce the losses included in the federal itemized deductions on Part II, line 16, column A. Enter these losses on Part II, line 16, column B.

c. Cancellation of Debt

Mortgage forgiveness debt relief – California law does not conform to federal law regarding the exclusion of income from discharge of indebtedness from the disposition of your principal residence occurring after December 31, 2017. Enter the amount of discharge on line 8c, column C.

Certain employer payments of student loans – California does not conform to the CARES Act regarding the exclusion of student loan payments made on behalf of an employee by an employer. Enter the amount of loan payment on line 8c, column C.

d. Foreign Earned Income Exclusion from Federal Form 2555

Federal foreign earned income and housing exclusion – Enter in column C, as a positive number, the amount excluded from federal income on federal Schedule 1 (Form 1040), line 8d.

Combat zone foreign earned income exclusion – Enter the amount excluded from federal income on line 8d, column C, as a positive number.

e. Income from Federal Form 8853

Rollover from an Archer MSA to an HSA – Since California does not recognize HSAs, a rollover from an Archer MSA to an HSA is treated as distribution not used for qualified medical expenses. For California, the distribution is included in California taxable income and the additional 12.5% tax applies. For more information, get form FTB 3805P.

Enter the amount rolled over from an Archer MSA to an HSA on line 8e, column C.

MSA distribution used for menstrual care products – For Archer MSA purposes, California does not conform to the inclusion of amounts paid for menstrual care products as qualified medical expenses. Enter the amount of MSA distribution used to pay for menstrual care products on line 8e, column C.

f. Income from Federal Form 8889

HSA distributions for unqualified medical expense – Distributions from an HSA not used for qualified medical expenses, and included in federal income, are not taxable for California purposes. Enter the distribution not used for qualified medical expenses on line 8f, column B.

k. Stock Options

Qualified equity grants – California law does not conform to federal law regarding the election to defer the recognition of income attributable to qualified stock. If you elected to defer income for federal purposes, make an adjustment on line 8k, column C.

n. IRC Section 951(a) Inclusion – Under federal law, if you are a U.S. shareholder of a CFC, you must include IRC Section 951(a) amount in your income. California law does not conform. If you included the amount as income for federal purposes on line 8n, column A, enter the amount on line 8n, column B.

o. IRC Section 951A(a) Inclusion – Under federal law, if you are a U.S. shareholder of a CFC, you must include your GILTI in your income. California law does not conform. If you included GILTI as income for federal purposes on line 8o, column A, enter the amount on line 8o, column B.

p. IRC Section 461(l) Excess Business Loss Adjustment – For taxable years beginning after December 31, 2018, California law generally conforms to the changes under the TCJA in regard to the disallowance of excess business loss deductions of non-corporate taxpayers. For California purposes, any disallowed loss will be treated as a carryover excess business loss instead of an NOL carryover for the subsequent taxable year. Also, California law does not conform to amendments under the CARES Act, the ARPA, and the Inflation Reduction Act of 2022. See General Information for more information.

If you are a noncorporate taxpayer and your net losses from all of your trades or businesses are more than $305,000 ($610,000 for married/RDP taxpayers filing a joint return), get form FTB 3461 to figure the excess business loss adjustment for California purposes. Enter the amount from form FTB 3461, line 16 or line 17, whichever applies, on line 8p, column C. Attach form FTB 3461 to the tax return.

Enter the amount of the federal excess business loss adjustment included on line 8p, column A, on line 8p, column B.

See line 8z for instructions on excess business losses carryover from prior years.

z. Other Income

Identify the type of income reported in the space provided. If there is more than one item to report on line 8z, attach a statement that lists each item and enter the total of all individual items in column B or column C as instructed below.

Wildfire relief payment – Federal law allows gross income exclusion for any amount received by an individual as a qualified wildfire relief payment as described in the Federal Disaster Tax Relief Act of 2023, Section 3. California law does not conform. If any qualified amount was excluded from income for federal purposes and California law provides no similar exclusion, enter that amount on line 8z, column C. For specific wildfire relief payments excluded for California purposes, see General Information .

Special rules for certain distributions from qualified IRC Section 529 tuition plans – The CAA, 2023, allows qualified IRC Section 529 tuition plans that have been maintained for 15 years to rollover to a Roth IRA without a tax or penalty. Under the federal law, rollover distributions from an IRC Section 529 plan to a Roth IRA after December 31, 2023, will be treated in the same manner as the earnings and contributions of a Roth IRA. California law does not conform to this federal provision. Rollover distribution from an IRC Section 529 plan to a Roth IRA is includible in California taxable income. For California purposes, enter the rollover distribution amount from an IRC Section 529 plan to a Roth IRA that was excluded from income for federal purposes on line 8z, column C.

Wildfire mitigation payment – California law allows a qualified taxpayer an exclusion from gross income for any amount received as a California qualified wildfire loss mitigation payment through the California Wildfire Mitigation Financial Assistance Program. If any qualified amount was included as income for federal purposes, enter the amount on line 8z, column B.

California HOPE for Children Trust Account Program – California law allows an exclusion from gross income for any funds deposited, any investment returns accrued, and any accrued interest in a HOPE trust account and for any funds from a HOPE trust account that is withdrawn or transferred by an eligible youth. If you included an amount qualifying for this exclusion as income for federal purposes, enter the amount on line 8z, column B.

Interagency Council on Homelessness payment exclusion – California law allows an exclusion from gross income for payments received pursuant to the California Welfare and Institutions Code Section 8257 by members of the Interagency Council on Homelessness, its advisory committee, or its working groups who are or have been homeless. If you included this amount as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.

Kincade wildfire exclusion – California law allows a qualified taxpayer an exclusion from gross income for any qualified amount received in a settlement from PG&E Company or its subsidiary relating to the 2019 Kincade Fire. If any qualified amount was included as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.

Discharge of student fees – California law allows an exclusion from gross income for any amount of unpaid fees due or owed by a student to a community college that was discharged. If you include the amount discharged as income for federal tax purposes on line 8z, column A, enter the amount on line 8z, column B.

Guaranteed income pilot program payment exclusion – California law allows an exclusion from gross income for any payments received by an individual from a guaranteed income pilot program or project that receives a grant pursuant to California Welfare and Institution Code Section 18997. If you included this amount as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.

Small business and nonprofit COVID-19 supplemental paid sick leave relief – California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program that is established by Section 12100.975 of the Government Code. If you included an amount qualifying for this exclusion as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.

Turf replacement water conservation program – California law allows an exclusion from gross income for any amount received as a rebate, voucher, or other financial incentive issued by a public water system, local government, or state agency for participation in a turf replacement water conservation program. If any amount was included as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.

Fire Victims Trust exclusion – California law allows a qualified taxpayer an exclusion from gross income for any amount received from the Fire Victims Trust. If any amount was included as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.

Thomas and Woolsey wildfires exclusion – California law allows a qualified taxpayer an exclusion from gross income for any amount received in a settlement from Southern California Edison for claims relating to the 2017 Thomas Fire or the 2018 Woolsey Fire. If any amount was included as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.

Excess business losses carryover from prior years – If in the current year, the taxpayer has enough business income to fully offset all of the excess business loss carryover from prior year, then the carryover balance is applied to offset the business income. Refer to form FTB 3461 instructions for line 14b and line 15 for further instructions. Enter the excess business losses carryover from prior years on line 8z, column B, and write "excess business losses carryover from prior years" on the space provided for line 8z.

California microbusiness COVID-19 relief grant – California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Microbusiness COVID-19 Relief Program that is administered by CalOSBA. Federal law has no similar exclusion. Enter on line 8z, column B the amount of this type of income.

California venues grant – California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the California Venues Grant Program that is administered by the CalOSBA. Federal law has no similar exclusion. Enter on line 8z, column B the amount of this type of income.

Small business COVID-19 relief grant – California law allows an exclusion from gross income for grant allocations received by a taxpayer pursuant to the COVID-19 Relief Grant under Executive Order No. E 20/21-182 and the California Small Business COVID-19 Relief Grant Program established by Section 12100.83 of the Government Code. If you included any amount as income for federal purposes on line 8z, column A, enter the amount on line 8z, column B.

Income exclusion for rent forgiveness – If for federal purposes gross income includes a tenant’s rent liability that is forgiven by a landlord or rent forgiveness provided through funds grantees received as a direct allocation from the Secretary of the Treasury, enter on line 8z, column B the amount of this type of income included on line 8z, column A.

Expanded use of IRC Section 529 account funds – California law does not conform to federal law regarding the IRC Section 529 account funding for elementary and secondary education or to the maximum distribution amount. If the amount was excluded for federal purposes, make an adjustment on line 8z, column C.

Native American earned income exemption – California does not tax federally recognized tribal members living in California Indian country who earn income from any federally recognized California Indian country. Military compensation is considered income from reservation sources. Enrolled members who receive reservation sourced per capita income must reside in their affiliated tribe’s Indian country to qualify for tax exempt status. For more information, get form FTB 3504. Enter on line 8z, column B the income included in federal income that is exempt for California and write “FTB 3504” on line 8z. Attach form FTB 3504 to Form 540.

Tax treaty – If you are claiming a tax treaty exemption on federal Schedule 1 (Form 1040), enter that amount on line 8z, column C as a positive number, unless it is specifically exempted for state purposes.

Parents’ election to report child’s interest and dividends – California law conforms to federal law for elections made by parents reporting their child’s interest and dividends. Parents may elect to report their child’s income on their California income tax return by completing form FTB 3803. If you make this election, the child will not have to file a tax return. You may report your child’s income on your California income tax return even if you do not do so on your federal income tax return.

If the amount of your child’s income you are reporting on your California income tax return is different than the amount you reported on your federal income tax return, enter the difference on line 8z, column B or column C and write “FTB 3803” on line 8z. Get form FTB 3803 for more information.

Reward from a crime hotline – Enter in column B the amount of a reward authorized by a government agency received from a crime hotline established by a government agency or nonprofit organization that is included in the amount on line 8z, column A.

You may not make this adjustment if you are an employee of the hotline or someone who sponsors rewards for the hotline.

Beverage container recycling income – Enter in column B the amount of recycling income included in the amount on line 8z, column A.

Rebates or vouchers from a local water agency, energy agency, or energy supplier – California law allows an income exclusion for rebates or vouchers from a local water agency, energy agency, or energy supplier for the purchase and installation of water conservation appliances and devices. Enter in column B the amount of this type of income included in the amount on line 8z, column A.

Financial incentive for seismic improvement – California law allows an income exclusion for loan forgiveness, grant, credit, rebate, voucher, or other financial incentive issued by the California Residential Mitigation Program or California Earthquake Authority to assist a residential property owner or occupant with expenses paid, or obligation incurred for earthquake loss mitigation. Enter in column B the amount of this type of income included in the amount on line 8z, column A.

Original issue discount (OID) for debt instruments issued in 1985 and 1986 – In the year of sale or other disposition, you must recognize the difference between the amount reported on your federal tax return and the amount reported for California purposes. Issuers : Enter the difference between the federal deductible amount and the California deductible amount on line 8z, column B. Holders : Enter the difference between the amount included in federal gross income and the amount included for California purposes on line 8z, column C.

Foreign income of nonresident aliens – Adjust federal income to reflect worldwide income computed under California law. Enter losses from foreign sources on line 8z, column B. Enter foreign source income on line 8z, column C.

Cost-share payments received by forest landowners – Enter on line 8z, column B the cost-share payments received from the California Department of Forestry and Fire Protection under the California Forest Improvement Act of 1978 or from the United States Department of Agriculture, Forest Service, under the Forest Stewardship Program and the Stewardship Incentives Program, pursuant to the federal Cooperative Forestry Assistance Act.

Coverdell ESA distributions – If you received a distribution from a Coverdell ESA, enter the difference between the federal taxable amount and the California taxable amount on line 8z, column B or column C.

Grants paid to low-income individuals – California law excludes grants paid to low-income individuals to construct or retrofit buildings to make them more energy efficient. Federal law has no similar exclusion. Enter on line 8z, column B the amount of this type of income.

California National Guard Surviving Spouse & Children Relief Act of 2004 – Death benefits received from the State of California by a surviving spouse/RDP or member-designated beneficiary of certain military personnel killed in the performance of duty are excluded from gross income. Military personnel include the California National Guard, State Military Reserve, or the Naval Militia. If you reported a death benefit on line 8z, column A, enter the death benefit amount in column B.

Ottoman Turkish Empire settlement payments – If you received settlement payments as a person persecuted by the regime that was in control of the Ottoman Turkish Empire from 1915 until 1923, your gross income does not include those excludable settlement payments, or interest, received by you, your heirs, or your estate for payments received on or after January 1, 2005. If you reported settlement payments on line 8z, column A, enter the amount of settlement payments in column B.