When preparing a CA return for a client, you may encounter a diagnostic error stating: "You need to have a CA W2 for Every Federal W2 in the return." This is because the state of CA wants all income to be reported, even if the W2 is for another state.
The below fix will address this issue for years 2015 and older:
You will want to go to the first CA W2 form in the Forms Tree and highlight it. Then, at the top of the CA W2 form, click the "Copy This Form" tab. Keep doing this until you have a matching amount of CA W2s to the Federal. Once you have a matching amount, you should no longer receive the diagnostic error.
The below fix will address this issue for years 2016 and above:
On the CA W-2 Pg 1, the first 2 W2's from the Federal will be listed below. If there are more than 2 W2s, then additional copies of the CA W-2 form will need to be created for each pair of W2s. Also, number each copy of the CA W-2 form for every additional copy you add to the return.
*NOTE* This error also occurs for OH state W2 forms, as well as some state Sch C forms. These errors are resolved the same way.