California Taxes: What’s New for Filing 2015 Tax Returns…

What’s New for Filing 2015 Tax Returns

Standard Deductions

The standard deduction amount for single or separate taxpayers increased from $3,992 to $4,044 for tax year 2015. For joint, surviving spouse, or head of household taxpayers, the standard deduction increased from $7,984 to $8,088 for tax year 2015.

Personal Exemptions

The personal exemption amount for single, separate, and head of household taxpayers increased from $108 to $109 for the 2015 tax year. For joint or surviving spouse, the personal exemption credit increased from $216 to $218.

Dependent Exemptions

The dependent exemption credit increased from $333 per dependent claimed in the 2014 tax year to $337 each for 2015.

Voluntary Contributions

Personal income taxpayers may contribute to the following two new funds:

  • State Children’s Trust Fund for the Prevention of Child Abuse.
  • Prevention of Animal Homelessness & Cruelty Fund.

Earned Income Tax Credit

For taxable years beginning on or after January 1, 2015, the refundable California Earned Income Tax Credit is available to taxpayers who earned wage income within California and lived here for more than six months. This credit is similar to the federal Earned Income Credit. This credit is available to taxpayers with earned income of less than $13,870. Additional information can be found on California form FTB 3514, California Earned Income Tax Credit.

Payments and Credits Applied to Use Tax

For taxable years beginning on or after January 1, 2015, if an individual or a corporation includes use tax on their income tax return, payments and credits will be applied to use tax first, then towards income tax, interest, and penalties. Additional information can be found in the instructions for the taxpayer’s income tax return.

Dependent Social Security Number (SSN)

For taxable years beginning on or after January 1, 2015, taxpayers claiming an exemption credit must write each dependent’s SSN in the spaces provided within line 10 on Form 540, California Resident Income Tax Return and Long or Short Form 540NR, California Nonresident or Part-Year Resident Income Tax Return or line 8 on Form 540 2EZ, California Resident Income Tax Return.

Financial Incentive for Seismic Improvement

For taxable years beginning on or after January 1, 2015, taxpayers can exclude from gross income any amount received as loan forgiveness, grant, credit, rebate, voucher, or other financial incentive issued by the California Residential Mitigation Program or the California Earthquake Authority to assist a residential property owner or occupant with expenses paid, or obligations incurred, for earthquake loss mitigation. Additional information can be found in the instructions for the taxpayer’s income tax return. /p>

Disaster Losses

For taxable years beginning on or after January 1, 2014, and before January 1, 2024, taxpayers may deduct a disaster loss for any loss sustained in any city, county, or city and county in California that is proclaimed by the Governor to be in a state of emergency. For these Governor-only declared disasters, subsequent state legislation is not required to activate the disaster loss provisions. Additional information can be found in the instructions for form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations – Individuals, Estates, and Trusts, and form FTB 3805Q, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations — Corporations.

Slain Officer Family Support Contribution

California does not conform to the federal Slain Officer Family Support Act of 2015, enacted April 1, 2015. For federal, taxpayers can choose to treat cash contributions for the relief of the families of slain New York Police Department detectives made between January 1, 2015 and April 15, 2015, as if made on December 31, 2014. Eligible contributions can be claimed on either a 2014 or 2015 federal tax return, but not both. Contributions made after April 14, 2015, but on or before December 31, 2015, can only be claimed on a 2015 federal tax return. For California purposes, contributions may only be claimed on a 2015 tax return. Taxpayers, who claimed contributions under the Slain Officer Family Support Act on their 2014 federal tax return, will make an adjustment to their 2015 California tax return to add the amount of the contribution to their charitable deductions. Taxpayers, who erroneously deducted the contribution on their 2014 California tax return, will need to amend their 2014 tax return to reduce the contribution.

Head of Household (HOH)

For taxable years beginning on or after January 1, 2015, California requires taxpayers who use HOH filing status to file form FTB 3532, Head of Household Filing Status Schedule, to report how the HOH filing status was determined.

Credits

Natural Heritage Preservation Credit

For qualified contributions made on or after January 1, 2015, the credit carryover period has been extended to 15 years or until exhausted whichever occurs first. Any unused credits remaining before January 1, 2015, will remain subject to an eight-year carryover provision. In addition, the period for when a qualified contribution is made, for which a tax credit will be allowed, has been extended to June 30, 2020.

Enterprise Zone (EZ) Sales or Use Tax Credit

For taxable years beginning on or after January 1, 2015, taxpayers cannot generate the EZ Sales or Use Tax Credit. However, taxpayers can claim the EZ Sales or Use Tax Credit carryover from previous years.

Extend the Time for Payment of Taxes for Corporations Expecting Net Operating Loss Carryback

A corporation or exempt organization that expects a net operating loss (NOL) in the 2016 taxable year can file form FTB 3593, Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback, to extend the time for payment of taxes for the immediately preceding 2015 taxable year. This includes extending the time for payment of a tax deficiency. The payment of tax that can be postponed cannot exceed the expected overpayment from the carryback of the NOL. For more information, get form FTB 3593.

Minimum Wage

Beginning on and after January 1, 2016, the minimum wage is $10.00 per hour. The California minimum wage was $9.00 per hour from July 1, 2014, through December 31, 2015.

 

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