To correct this error within your account Please take the following steps:
- Go to the California State return
- Select the "Payments" section
- Select "Withholdings from Form 1099" and change the Form Type to "Blank" and delete the "Withholdings" you have entered.
- Select "Continue to Next Step" to save your entries and exit the state return.
Resubmit your return through the "E-file" tab.
This reject code indicates a discrepancy between the withholdings that you are reporting and what has been reported to California. This is usually due to a manual entry made in the CA state return section.