Sacramento–The Franchise Tax Board (FTB) today announced it is now accepting 2011 state
tax returns. Also, FTB provides the following updates on law changes and filing services.
Final filing date is Tuesday, April 17 – FTB will consider tax returns and payments mailed or
submitted on April 17, as timely.
Individual tax rate decreases – The top tax rate dropped one-quarter percent from 9.55 percent
to 9.3 percent due to the expiration of tax increases enacted two years ago.
Standard deduction – The standard deduction for single or filing separately tax statuses
increased from $3,670 to $3,769. For joint, surviving spouse, or head of household filers, it
increased from $7,340 to $7,538.
Exemption credit increases – The dependent exemption credit increased from $99 to $315 per
dependent. The personal exemption amount for single, filing separately, and head of household
filers increased from $99 to $102. For joint or surviving spouses, it increased from $198 to $204.
Child and Dependent Care Expenses Credit – Beginning in 2011, this credit is non-refundable.
Individuals who pay for dependent care to seek or maintain employment may qualify for this credit
worth up to $1,125.
Check your county tax bill when deducting real estate taxes – FTB advises taxpayers to
examine their county property tax bill to determine the deductible and nondeductible portions to
report on their itemized deductions. Taxpayers should not rely on the federal Form 1098,
Mortgage Interest Statement, which often reflects the total amount paid to the county, including
other parcel taxes and fees that are not deductible.
Starting in 2012, FTB plans to add reporting requirements related to real estate deductions such
as property parcel number, deductible, and nondeductible amounts. For samples of all counties’
property tax bills and guidance on determining which taxes and fees are deductible, visit
ftb.ca.gov and search for real estate tax.
Use tax look-up table – New this year, taxpayers can use a “look-up” table to report their use tax
obligations on their state return. The estimated amount of use tax due is based on the individual’s
adjusted gross income. A use tax liability typically occurs when a California consumer or business
purchases tangible items for their own use from an out-of-state retailer that does not collect the
California use tax. Taxpayers can go to boe.ca.gov for more details.
New Jobs tax credit – This incentive provides a credit of up to $3,000 for each added qualified
full-time employee hired by a qualified small business employer. Funding is limited to $400 million.
As of January 1, $324 million remains available. The credit must be claimed on a timely-filed
original (not amended) 2011 return received before the $400 million limit is exhausted.
In general, employers qualify for the credit if they employed 20 or fewer employees in the prior
year. They must have a net increase in qualified full-time employees in 2011 compared to the
number of full-time employees employed in the prior year.
Net operating losses suspended – For 2010 and 2011, net operating losses from prior years
cannot be deducted by certain taxpayers. The net operating loss suspension rules do not apply to
taxpayers with net income of less than $300,000 or with disaster loss carryovers
