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Notes from the Tax Practitioner Stakeholder Specialist

Conformity: AGI phase out limits

For 2008, the AGI phase out limits for IRAs have been indexed for federal purposes. There has been some confusion over whether or not California conforms to these indexed amounts. California does conform to the federal Roth IRA phase out amounts, but not the new federal Traditional IRA phase out amounts. Therefore, although Roth IRA phase out amounts for California purposes are the same as federal, your clients could potentially have a different federal basis than state basis if they fall between the phase out limits, and are contributing to a traditional IRA.

Here are the 2008 phase out amounts.

Tradition IRA phase out range

Filing status Federal California
Single $52,000 - $62,000 $50,000 - $60,000
Joint returns $83,000 - $103,000 $75,000 - $85,000
Individual not active participant,
but spouse is
$156,000 - $166,000 $150,000 - $160,000

Roth IRA phase out range

Filing status Federal California
Single $99,000 – $114,000 $99,000 - $114,000
Joint returns $156,000 - $166,000 $156,000 - $166,000
Individual not active participant,
but spouse is
$156,000 - $166,000 $150,000 - $160,000