The rate of inflation in California, for the period from July 1, 2005 through June 30, 2006, was 4.8%. The 2006 personal income tax brackets are indexed by this amount.
Corporate tax rates
| Entity type | Tax rate |
|---|---|
| Corporations other than banks and financials | 8.84% |
| Banks and financials | 10.84% |
| AMT rate | 6.65% |
| S corporation rate | 1.5% |
| S corporation bank and financial rate | 3.5% |
Individual tax rates
- The maximum rate for individuals is 9.3%
- The AMT rate for individuals is 7%
Exemption credits
| Filing Status/Qualification | Exemption amount |
|---|---|
| Married/RDP filing jointly and qualifying widow(er) | $182 |
| Single, married/RDP filing separately, and head of household | $91 |
| Dependent | $285 |
| Blind | $91 |
| Age 65 or older | $91 |
Phaseout of exemption credits
Higher-income taxpayers' exemption credits are reduced as follows:
| Filing status | Reduce each credit by: | For each: | Federal AGI exceeds: |
|---|---|---|---|
| Single | $6 | $2,500 | $150,743 |
| Married/RDP filing separately | $6 | $1,250 | $150,743 |
| Head of household | $6 | $2,500 | $226,119 |
| Married/RDP filing jointly | $12 | $2,500 | $301,491 |
| Qualifying widow(er) | $12 | $2,500 | $301,491 |
When applying the phaseout amount, apply the $6/$12 amount to each exemption credit, but do not reduce the credit below zero. If a personal exemption credit is less than the phaseout amount, do not apply the excess against a dependent exemption credit.
Standard deductions
The standard deduction amounts for:
| Filing status | Deduction amount |
|---|---|
| Single and married/RDP filing separately | $3,410 |
| Married/RDP filing jointly, head of household and qualifying widow(er) | $6,820 |
| The minimum standard deduction for dependents | $850 |
Reduction in itemized deductions
Itemized deductions must be reduced by the lesser of 6% of the excess of the taxpayer's federal AGI over the threshold amount or 80% of the amount of itemized deductions otherwise allowed for the taxable year.
| Filing status | AGI threshold |
|---|---|
| Single and married/RDP filing separately | $150,743 |
| Head of household | $226,119 |
| Married/RDP filing jointly and qualifying widow(er) | $301,491 |
Nonrefundable Renter's credit
This nonrefundable, non-carryover credit for renters is available for:
- Single and married/RDP filing separately with a California AGI of $32,272 or less.
- The credit is $60.
- Married/RDP filing jointly, head of household, and qualifying widow(er) with a California AGI of $64,544 or less.
- The credit is $120.
Miscellaneous credits
- Qualified senior head of household credit
- 2% of California taxable income
- Maximum California AGI of $58,963
- Maximum credit of $1,111
- Joint custody head of household credit and dependent parent credit
are each:
- 30% of net tax
- Maximum credit of $363
AMT exemption
| Filing status | Amount |
|---|---|
| Married/RDP filing jointly and qualifying widow(er) | $73,916 |
| Single and head of household | $55,437 |
| Married/RDP filing separately, estates, and trusts | $36,956 |
AMT exemption phaseout
| Filing status | Amount |
|---|---|
| Married/RDP filing jointly and qualifying widow(er) | $277,183 |
| Single and head of household | $207,888 |
| Married/RDP filing separately, estates, and trusts | $138,591 |
FTB cost recovery fees
| Fee type | Fee |
|---|---|
| Bank and corporation filing enforcement fee | $202 |
| Bank and corporation collection fee | $168 |
| Personal income tax filing enforcement fee | $125 |
| Personal income tax collection fee | $126 |
The personal income tax fees apply to individuals and partnerships, as well as limited liability companies that are classified as partnerships. The bank and corporation fees apply to banks and corporations, as well as limited liability companies that are classified as corporations. Interest does not accrue on these cost recovery fees.
2006 California Tax Rate Schedules
Schedule X — Single, married/RDP filing separately
If the taxable income is
| Over | But not over | Tax is | Of amount over | ||
|---|---|---|---|---|---|
| $0 | $6,622 | $0.00 | plus | 1% | $0 |
| $6,622 | $15,698 | $66.22 | plus | 2% | $6,622 |
| $15,698 | $24,776 | $247.74 | plus | 4% | $15,698 |
| $24,776 | $34,394 | $610.86 | plus | 6% | $24,776 |
| $34,394 | $43,467 | $1,187.94 | plus | 8% | $34,394 |
| $43,467 | And over | $1,913.78 | plus | 9.3% | $43,467 |
Schedule Y — Married/RDP filing jointly and qualifying widow(er) with dependent child
If the taxable income is
| Over | But not over | Tax is | Of amount over | ||
|---|---|---|---|---|---|
| $0 | $13,244 | $0.00 | plus | 1% | $0 |
| $13,244 | $31,396 | $132.44 | plus | 2% | $13,244 |
| $31,396 | $49,552 | $495.48 | plus | 4% | $31,396 |
| $49,552 | $68,788 | $1,221.72 | plus | 6% | $49,552 |
| $68,788 | $86,934 | $2,375.88 | plus | 8% | $68,788 |
| $86,934 | And over | $3,827.56 | plus | 9.3% | $86,934 |
Schedule Z — Unmarried head of household
If the taxable income is
| Over | But not over | Tax is | Of amount over | ||
|---|---|---|---|---|---|
| $0 | $13,251 | $0.00 | plus | 1% | $0 |
| $13,251 | $31,397 | $132.51 | plus | 2% | $13,251 |
| $31,397 | $40,473 | $495.43 | plus | 4% | $31,397 |
| $40,473 | $50,090 | $858.47 | plus | 6% | $40,473 |
| $50,090 | $59,166 | $1,435.49 | plus | 8% | $50,090 |
| $59,166 | And over | $2,161.57 | plus | 9.3% | $59,166 |
Individual Filing Requirements
| Filing Status | Age as of December 31, 2007 * | California Gross Income | California Adjusted Gross Income | ||||
|---|---|---|---|---|---|---|---|
| Dependents | Dependents | ||||||
| 0 | 1 | 2 or more | 0 | 1 | 2 or more | ||
| Single or head of household | Under 65 | 13,713 | 23,213 | 30,338 | 10,970 | 20,470 | 27,595 |
| 65 or older | 18,263 | 25,388 | 31,088 | 15,520 | 22,645 | 28,345 | |
| Married/RDP filing jointly or separately | Under 65 (both spouses/RDPs) |
27,426 | 36,926 | 44,051 | 21,940 | 31,440 | 38,565 |
| 65 or older (one spouse) |
31,976 | 39,101 | 44,801 | 26,490 | 33,615 | 39,315 | |
| 65 or older (both spouses/RDPs) |
36,526 | 43,651 | 49,351 | 31,040 | 38,165 | 43,865 | |
| Qualifying widow(er) | Under 65 | N/A | 23,213 | 30,338 | N/A | 20,470 | 27,595 |
| 65 or older | 25,388 | 31,088 | 22,645 | 28,345 | |||
| Dependent of another person - Any filing status | Under 65 | More than your standard deduction | |||||
| 65 or older | More than your standard deduction | ||||||
* If you turn 65 on January 1, 2007, you are considered to be age 65 at the end of 2006.