The Franchise Tax Board released the 2009 state tax brackets, indexed each year by adjusting them to reflect changes in the California Consumer Price Index.
Filing requirement thresholds, standard deduction, and certain credits were adjusted, along with income tax brackets, based on the deflation rate of -1.5 percent.
The standard tax deduction will decrease for single or “married filing separate” taxpayers from last year’s rate of $3,692 to $3,637. For joint, surviving spouse, or head-of-household taxpayers, the standard deduction decreases from $7,384 to $7,274. The personal exemption credit amount for single, separate, and head-of-household filers will decrease from $99 to $98 and for joint filers or surviving spouses it will decrease from $198 to $196. Renter’s credit is available for single filers with adjusted gross incomes of $34,412 or less and joint filers with adjusted gross incomes of $68,824 or less.
A new tax law sets the dependent exemption credit for tax years 2009 and 2010 to the indexed personal exemption credit, lowering the credit to $98. Last year’s credit was $309.
Other tax credits affected by indexing include the joint custody head of household credit, dependent parent credit, and qualified senior head of household credit.
For more information, visit the Franchise Tax Board online at ftb.ca.gov.
This article appears in Sep 3-10, 2009.