FreeTaxUSA is not allowing me to file California state taxes because of crypto losses while in ANOTHER state? WHY?
I sold some crypto in 2025 and lost $37 overall. I entered this on my federal forms (which have not been filed yet). 100% of this was done in another state (which does not have state taxes, and doesn't require filing).
While doing my state taxes, they show the "Federal Adjusted Amount" as -$37. They ask for the California amount, and I enter $0.
Then it says:
>You have a California Net Operating Loss (NOL) for 2025.
>We've calculated that you have a resident California capital loss carryover of $37. You'll need this amount when you file your California 2026 tax return.
Except... no I don't. I incurred no gains or losses in California in 2025. None.
And because of this, it's giving me this error:
>Income Situation Not Supported - You entered a net operating loss scenario that our software currently doesn't support on California returns, so you won't be able to use FreeTaxUSA to file your 2025 California tax return. We apologize for the inconvenience.
What?? This is not correct, and now I can't file. What am I supposed to do? I already sent a message to support. Am I doing something wrong here? This is the first time I've ever encountered this.