California Tax Updates and Conformity Issues

  • California has not conformed to the Federal Tax Cuts and Jobs Act Bill passed in December 2017.  Many California taxpayers who don't itemize under the new federal code may still be able to itemize deductions on their California returns.
  • California SDI rates for 2020 are 1.0% and the maximum wages qualifying increases to $122,909.
  • California estimated tax payments are now front loaded.  Estimated tax payments for individuals now require 30% for the first installment due April 15th, 40% for the second estimate installment due June 15th, no estimate installment is due on September 15th and 30% for the fourth estimate installment due January 15th.
  • California requires withholding of 3 1/3% on sales of real estate other than the sale of a personal residence.
  • 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.  Income earned on HSA's in California is taxable income.
  • California has conformed to the new limits on IRA's and Roth IRA's
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Donald C.Hubbard

6507 Pacific Ave. #342

Stockton, CA 95207

 

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