California Tax Updates and Conformity Issues

• California has conformed to the Federal mortgage relief rules on foreclosures. 
• California minimum wage increased to $8.00 on January 1, 2008. 
• California SDI rates for 2008 are .8% on wages up to $86,698.  The maximum withholding is therefore $693.58 for 2008. 
• The California teacher retention credit no longer allowed.
• California requires withholding of 3 1/3% on sales of real estate other than the sale of a personal residence
• California now offers web payment of taxes.  
• California has not conformed to the federal rules allowing the deduction of Health Savings Accounts, therefore, HSA's are not currently deductible in California.  Therefore, on California returns, the Federal HSA deductions are added back to income.
• California has conformed to the new limits on IRA's and Roth IRA's
• The IRS has ruled that the California Paid Family Leave insurance program is taxable income to the recipients on their federal income tax returns.  These benefits are not taxable for California.