Governor Jerry Brown’s Proposition 30 passed this month, retroactively increasing income taxes effective January 1, 2012. These rates will remain in effect for seven years (through the end of 2018) as follows:
New Rates for 2012-2018 |
|
| 10.3% (1% increase) on income of: | $250,001–$300,000 for single/MFS; $340,001–$408,000 for HOH; and $500,001–$600,000 for MFJ. |
| 11.3% (2% increase) on income of: | $300,001–$500,000 for single/MFS; $408,001–$680,000 for HOH; and $600,001–$1,000,000 for MFJ. |
| 12.3% (3% increase) on income of: | More than $500,000* for single/MFS; More than $680,000* for HOH; and More than $1,000,000* for MFJ. |
(*Note: Income in excess of $1 million is also still subject to the 1% mental health services tax.)
Proposition 30 also increases the state sales tax rate by 0.25% for four years, beginning January 1, 2013, bringing the standard statewide rate to 7.50% (currently 7.25%).
Affected taxpayers should expect to make larger CA income tax payments with their returns or extensions due April 15, 2013 to account for the full-year effect of the rate increase.
Please contact us if you have any questions.
PDF print version: Retroactive CA Income Tax Increase, Effective January 1, 2012
Any tax advice in this communication is not intended or written by Navolio & Tallman LLP to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer, or (ii) promoting, marketing, or recommending to another party any matters addressed herein. With this newsletter, Navolio & Tallman LLP is not rendering any specific advice to the reader.