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State provides credit for child, dependent care expenses Inside...

Approximately 700,000 California taxpayers will qualify for a new refundable credit this year--a credit that provides up to $907 for child and dependent care expenses.

The passage of Assembly Bill 480 established the new credit for household and dependent care expenses necessary for gainful employment. The credit is based on the federal child and dependent care expenses credit (see IRS Publication 503 for details).

We estimate that approximately 50,000 individuals who have no tax filing requirement will qualify to claim the credit and that $195 million will be paid to eligible filers as refunds or credits against tax due.

The credit is a percentage of the federal credit, depending on the taxpayer's California adjusted gross income (AGI). Here are the applicable percentages:

If the taxpayer's California AGI is $40,000 or less, the percentage of the allowable federal credit which may be claimed is 63 percent.

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Filing portal open for e-business

As we reported last year in Tax News, we will offer taxpayers a new option for filing their personal income tax returns this year — the filing portal.

The new filing portal provides taxpayers with citizen-to-government electronic transactions that are direct, convenient and secure.

Here's how it works: Taxpayers who choose to file via the portal will use commercial software to prepare their returns. Participating tax preparation software companies will help customers transmit their data to us via an individual, online session.

The portal project was developed in close partnership with the tax preparation software industry and the National Association of Computerized Tax Processors (NACTP).

Customer service
Taxpayers who use the portal will be able to find out if we received their return and the status of their refund in two ways: they can use their commercial software to retrieve an acknowledgement (as with traditional e-filing), or they can log onto our website to view the acknowledgement information.

Note: We will provide customer support to taxpayers who have questions about portal filing, acknowledgements, etc. The software companies will answer customers' questions about the preparation of the tax return.

Our portal will use the most current encryption software available for the transmission of the return and retrieval of the acknowledgment.

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