CA Releases 2017 Rate Schedules, Filing Thresholds

The California Franchise Tax Board has released the 2017 California personal income tax:

  • rate schedules;
  • return filing threshold table;
  • itemized deduction reduction thresholds;
  • personal exemption phaseout thresholds;
  • miscellaneous credit amounts; and
  • alternative minimum tax exemption amounts.

Adjusted standard deduction, personal exemption, and renter’s credit amounts were previously reported. The adjusted figures are based on a 2.6% inflation rate for the period from July 1, 2016, to June 30, 2017.

Rates

California has adjusted the personal income tax rates for all taxpayers in 2017.

The rates for single taxpayers and married taxpayers filing separately range from 1.0% of the first $8,223 of taxable income (formerly, $8,015 for 2016) to 12.3% of taxable income that is $551,473 and over (formerly, $537,498 and over for 2016).

In addition, for married taxpayers filing jointly and surviving spouses with a dependent child, the rates range from 1.0% of the first $16,446 of taxable income (formerly, $16,030 for 2016) to 12.3% of taxable income that is $1,102,946 and over (formerly, $1,074,996 and over for 2016).

Finally, for taxpayers filing as heads of households, the rates range from 1.0% of the first $16,457 of taxable income (formerly, $16,040 for 2016) to 12.3% of taxable income that is $750,003 and over (formerly, $730,997 and over for 2016).

Filing Thresholds

A single taxpayer or head of household taxpayer must file a return if the taxpayer’s adjusted gross income (AGI) exceeds an amount ranging from $13,623 to $35,208 (formerly, $13,278 to $34,308 for 2016) or if the taxpayer’s gross income exceeds an amount ranging from $17,029 to $38,614 (formerly, $16,597 to $37,627 for 2016).

A surviving spouse taxpayer with dependents must file a return if the taxpayer’s AGI exceeds an amount ranging from $25,390 to $35,208 (formerly, $24,745 to $34,308 for 2016) or if the taxpayer’s gross income exceeds an amount ranging from $28,796 to $38,614 (formerly, $28,064 to $37,627 for 2016).

The corresponding AGI and gross income thresholds requiring married couples to file a return range from $27,249 to $54,534 (formerly, $26,558 to $53,138 for 2016) and from $34,060 to $61,345 (formerly, $33,197 to $59,777 for 2016), respectively.

The number of dependents and the taxpayer’s age (under 65, or 65 or older) determine the filing threshold level that applies.

Itemized Deduction Reduction and Personal Exemption Phaseout Thresholds

The AGI thresholds that activate the reduction of itemized deductions and the phaseout of personal exemption credits for 2017 are:

  • $187,203 for single taxpayers and married taxpayers filing separately (formerly, $182,459 for 2016);
  • $374,411 for married taxpayers filing jointly and surviving spouses (formerly, $364,923 for 2016); and
  • $280,808 for heads of households (formerly, $273,692 for 2016).

Credits

For 2017, the earned income credit is available to households with federal AGI of less than:

  •  $15,009 if there are no qualifying children (formerly, $6,718 for 2016);
  •  $22,323 if there is one qualifying child (formerly, $10,088 for 2016);
  • $22,310 if there are two qualifying children (formerly, $14,162 if there were two or more qualifying children for 2016); or
  • $22,303 if there are three or more qualifying children (formerly, $14,162 if there were two or more qualifying children for 2016).

The joint custody head of household credit and the dependent parent credit are increased for 2017 to the lesser of $451 (formerly, $440 for 2016) or 30% of net tax.

The qualified senior head of household credit is increased for 2017 to 2% of taxable income of up to $73,226 (formerly, $71,370 for 2016), up to a $1,380 (formerly, $1,345 for 2016) maximum credit amount.

Alternative Minimum Tax Exemption

California increased the alternative minimum tax exemption amounts for 2017 to:

  • $68,846 (formerly, $67,101 for 2016) for single or unmarried taxpayers;
  • $45,895 (formerly, $44,732 for 2016) for married taxpayers filing separately and estates and trusts; and
  • $91,793 (formerly, $89,467 for 2016) for married taxpayers filing jointly and surviving spouses.

Exemption phaseouts begin at the following alternative minimum taxable income levels for 2017:

  • $258,168 (formerly, $251,626 for 2016) for single or unmarried taxpayers;
  • $172,110 (formerly, $167,749 for 2016) for married taxpayers filing separately and estates and trusts; and
  • $344,225 (formerly, $335,502 for 2016) for married taxpayers filing jointly and surviving spouses.

2017 California Tax Rates and Exemptions, California Franchise Tax Board, October 2017

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