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New California Proposition 30

As a result of the passage of Proposition 30, California Personal Income Tax Rates for various taxpayers will be increased retroactively to January 1, 2012. These increases will be effective through 2018. Previously, the maximum Personal Income Tax Rate in California was 9.3%.

Taxable Income of Single Filers
$0 to $250,000 9.3% max. rate
$250,001-300,000 10.3%
$300,001-500,000 11.3%
Over $500,000 12.3%

Taxable Income of Joint Filers
$0 to $500,000 9.3% max. rate
$500,001-600,000 10.3%
$600,001-1,000,000 11.3%
Over $1,000,000 12.3%

In addition, filers with taxable income greater than $1,000,000 will still pay the 1% Mental Health Services Tax on taxable income in excess of $1,000,000. The Franchise Tax Board has stated that it won’t assess underpayment penalties for 2012 to the extent the underpayment of tax is due to the retroactive Proposition 30 tax increases.

Due to this retroactive California tax law change and the scheduled Federal tax law changes (if no action is taken by Congress), year-end tax planning is more crucial than ever. Please contact us so that we can determine how these changes will impact you.

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