11 Tax Topic CA 1

You are not in a registered domestic partnership if you have never entered into a registered domestic partnership, you filed a Notice of Termination of Domestic Partnership with the Secretary of State and the six-month waiting period for the notice to become final has passed or your registered domestic partnership was annulled and you did not enter into another registered domestic partnership after the annulment.

Effective for taxable years beginning on or after January 1, 2007, RDPs under California law must file their California income tax returns using either the married/RDP filing jointly or married/RDP filing separately filing status. If you are an RDP, you may qualify to use the head of household filing status if you are in the process of ending your relationship and you meet the requirements to be considered not in a registered domestic partnership.

You were not in a registered domestic partnership if your registered domestic partnership was legally terminated under a final decree of dissolution. Neither a petition for termination nor an interlocutory decree of termination is the same as a final decree. Until the final decree is issued, an RDP remains in a registered domestic partnership.

You must be entitled to claim a dependent exemption credit for your parent to be head of household. That is, your parent must meet the requirements of a qualifying relative, you must have paid more than half the cost of keeping up a home that was your parent's main home for the entire year and also your parent's main home could have been his or her own home or any other living accommodation.

In meeting the residency test, a temporary absence may be due to illness, for education, business, vacation or military service or for incarceration.

To qualify for head of household filing status, your qualifying relative's gross income must be less than the federal exemption amount for the year in question.

If two or more taxpayers including a parent claim the same child as a qualifying child for a particular tax year, the person shall be treated as the qualifying child of the taxpayer who is a parent of the person or (if none of the taxpayers is a parent) the taxpayer with the highest adjusted gross income for the taxable year.

For 2011, you may file married/RDP filing jointly if you were never married and never entered into a registered domestic partnership, your spouse/RDP died in 2011 and you did not remarry or your spouse?RDP died in 2012 before you filed a 2011 tax return.

A registered domestic partner is a person who has filed a Declaration of Domestic Partnership with the California Secretary of State.

To be head of household, you must provide more than half of a person's total support during the calendar year to meet the support test. To determine whether you have provided more than half the support, compare the amount you contributed for the person's support to the entire amount of support the person received from all sources.

You are considered to have chosen to treat your nonresident alien spouse/RDP as a resident alien if you and your nonresident alien spouse/RDP filed a joint return in a previous year, you chose to treat your nonresident alien spouse/RDP as a resident so you could file the joint return and you have not revoked that choice by the extended due date for filing the return at issue.

I was married at the end of the year. Can someone other than my child qualify me for the Head of Household filing status? No, because I was married.

Can I qualify for the Head of Household filing status if the person that qualifies me did not live with me during the year? Yes, if the person is my parent, he or she does not have to live with me to qualify me.

I was married at the end of the year. Can I qualify for the Head of Household filing status if I lived with my wife during part of the last six months of the year? No. Because I was married and therefore I do not meet certain requirements to be considered unmarried.

Can I qualify for the Head of Household filing status even though the qualifying person is not my relative? No. Only certain relatives can qualify you for the Head of Household filing status.

The Head of Household (HOH) filing status gives you the benefit of a lower tax and a higher standard deduction that the that of Single or Married Filing Separately filing status.

You paid $5,100 in child care, you are single and earned $28,000 for the entire year, and you have one qualifying child. Your child and dependent care expenses credit for tax year 2011 is $420.

I want to file my return and have no tax liability. If I claim the child and dependent care expenses credit, would I still get a refund for California based on my Child and dependent Care expenses credit? No, the amount of credit is limited to the amount of tax liability and is non-refundable.

Juan and Maria Escobedo are married and keep up a home for their two pre-school children. In tax year 2011, they claimed their children as dependents. Juan earned $25,200 and Maria earned $8,200. They paid $5,900 in work related child care expenses. Their credit is $738.

To claim the Child and Dependent Care Expenses Credit for California, you must complete and attach to your California tax return FTB Form 3506.

In tax year 2011, if your gross income is $45,000 and your federal child and dependent care expenses credit amount was $480, then your California Credit is $206.

For Federal the child and dependent care expenses credit is a non-refundable credit and for California the credit is also non-refundable.

The percentage of the federal Child and Dependent Expenses Care credit that is allowed for California for taxpayers who earned more than $100,000 in 2011 is 0%.

In tax year 2011, to qualify for the California child and dependent care expenses credit, your federal adjusted gross income must be less than $100,000.

In tax year 2011, if you are head of household and you would like to qualify for renter's credit, you would not qualify if your income is over $71,318.

If for more than half of the year, you lived in the home of a parent, foster parent, or legal guardian in 2011 who can claim you as a dependent, then you do not qualify for the renter's credit.

The non-refundable renter's credit qualification record must be kept with your records; therefore, you should not mail it.

To qualify for Renter's credit, you must have paid rent for at least 6 months of the tax year and your principal residence must have been in California.

If your filing status was married filing separate, you are still able to claim the California renter's credit.

If a single employer withheld California State Disability Insurance (SDI) from your wages at more than 1.2% of your gross wages, contact the employer for refund. You cannot claim the credit if you only have one employer.

You may be entitled to claim a credit for excess SDI on Form 540/540A if you had two or more employers during 2011, if you received more than $93,316 in wages, and if the amounts of SDI withheld appear on your forms W2.

If you discover that you made an error on your California income tax return after you filed it, use Form 540X to correct your return.

For purposes of claiming the California Child and Dependent Care Expenses Credit, if your child turns age 13 during the year the child is a qualifying person only for the part of the year he or she was 12 years old.

In tax year 2011, my wife did not work all year because she was not able to care for herself for the entire year. I worked and earned $21,050. We have one qualifying child for the Child and Dependent care credit. We paid $2,000 for child care. We can qualify for $310 of the credit.

If you are single and only paid rent for one month in 2011, you do not qualify to claim the renter's credit. You must have paid rent for at least 6 months in year 2011.

If you do not e-file your tax return, you may receive your refund just as fast, but most likely this is not so. Although there are less paper returns processed because almost everyone is e-filing, it is still much more faster to e-file your return and you will receive your refund faster too.

If there is no difference between your federal and California income or deductions, do not file a Schedule CA (540).

Individuals that would qualify you for the Child and Dependent Care Credit would be a dependent under 13 years of age, a dependent who is physically or mentally unable to care for him or herself or a spouse who is physically or mentally unable to care for him or herself.

One of the requirements to qualify to claim the Child and Dependent Care Credit for California is that you paid for care so you (and your spouse/RDP) could work or look for work.

Your must pay at 100% of the amount owed by April 17, 2012 to avoid interest and penalty charges.

You qualify for the Nonrefundable Renter's Credit if you rented a property for more than half the year that was not exempt from California property tax in 2011.

All domestic partners should either file jointly, separately or as head of household (if they qualify) under the new law.

You may not claim the Credit for Dependent Parent if you used the single, head of household, qualifying widow (er), or married/RDP filing jointly filing status. Claim this credit only if you were married/or an RDP at the end of 2010 and you used the married/RDP filing separately filing status, your spouse/RDP was not a member of your household during the last six months of the year and you furnished over one-half the household expenses for your dependent mother's or father's home, whether or not she or he lived in your home.

You may be entitled to claim a credit for excess SDI (or VPDI) only if more than 1.2% of your wages was over withheld from more than one employer. If more than this amount was withheld from only one employer then you should ask that employer for a refund. Thus, you cannot claim the credit if this is so.

The 2011 SDI (or VPDI) limit is $93,316.

If you and your spouse/RDP paid joint estimated taxes but are now filing separate income tax returns, either of you may claim the entire amount paid.

Attach a doctor's statement to the back of Form 540/540A indicating your or your spouse/RDP are visually impaired only the first time you file a tax return to claim the blind exemption credit.

What if I can't file by April 17, 2012, and think I owe tax? Then I would estimate the amount of tax owed by completing Form 3519.

If all your W-2 forms were not received by January 31, 2012, ask your employer (s) for a W-2. You must file your tax return and report all income received in the year, regardless if you received a W-2 or not.

You never received a Form W-2 and you asked your employer for one and employer refuses to issue a form, you should complete form FTB 3525 with your wage and withholding information.

If you didn't itemize deductions on your federal tax return it is possible to itemize deductions on your California tax return.

The Head of Household filing status is for taxpayers who are either unmarried and not an RDP or meet the requirements to be considered unmarried or considered not in a registered domestic partnership and maintain a home for a relative who lived in them for more than half the year.

An eligible foster child is a child for head of household purposes is a child placed with you by an authorized placement agency or by a judgment, decree, or other order of a court of competent jurisdiction.

Generally, if two or more people keep up the same home, only one of the people could pay more than half the costs and qualify for the head of household filing status. When two or more families occupy the same dwelling, each family may be treated as keeping up a separate home if each family maintains separate finances and neither family contributes to the support of the other family.

The taxpayer who provides more than half the cost of maintaining a separate home is treated as keeping up that separate home. To determine whether you paid more than half the cost of keeping up your home does not include costs of clothing and vacations, costs for education and transportation or costs for medical treatment and life insurance. This items would be considered for figuring the support of a dependent directly and not for the cost of maintaining a home.

If someone lived with you for six months this does not mean that the person lived with you more than half the year for head of household purposes.

If you have joint custody of your child, to qualify for head of household filing status, you must still meet all the requirements for the filing status, must have a child that must have lived with you for more than half the year and have paid more than half the cost of keeping up your home.

If you were married as of the last day of the year, and you did not live with your spouse at any time during the last six months of the year, to determine how many days your home was your qualifying person's main home, add together half the number of days that you, your spouse, and your qualifying person lived together in your home and add together all of the days that you and your qualifying person lived together in your home without your spouse.

If you were married as of the last day of the year and you lived with your spouse at any time during the last six month of the year, you cannot qualify for the head of household filing status.

You are considered to have chosen to treat your nonresident alien spouse/RDP as a resident alien if you and your nonresident alien spouse/RDP filed as joint return in a previous year, you chose to treat your nonresident alien spouse/RDP as a resident so you could file the joint return and you have not revoked the choice to treat your nonresident alien spouse as a resident by the extended due date for filing the return at issue.

Residents of California are taxed on all income, including income from sources outside California.

For California, a resident is any individual who is in California for other than a temporary or transitory purpose and who is domiciled in California, but outside California for a temporary or transitory.

The underlying theory of residency is that you are a resident of the place you have the closest connections.

You and your spouse are California residents. You accept a contract to work in South America for 16 months. You lease an apartment near the job site. Your contract states that your employer will arrange your return to California when your contract expires. Your spouse and children will remain in California residing in the home you own. As a result, you are taxed on income from all sources, including income from South America.

You are a resident of California. You accept a 15-month assignment in Saudi Arabia. You put your personal belongings, including your automobile, in storage in California. You have a California driver's license and are registered to vote in California. You maintain bank accounts in California. In Saudi Arabia, you stay in a compound provided for you by your employer, and the only ties you establish there are connected to your employment. Upon completion of your assignment, you will return to California. As a California resident, your income from all sources is taxable by California, including the income that you earned for your assignment in Saudi Arabia.

A tax treaty between the U.S. Government and a foreign country may exempt some types of income from federal taxation. Generally, unless the treaty specifically excludes the income from taxation by California, the income is taxable to California.

The Franchise Tax Board does not issue tax clearance certificates for individuals as federal income tax clearance is issued.

California does not allow a foreign tax credit or a foreign earned income exclusion as federal does.

The wages of nonresident flight personnel (e.g. pilot, copilot, flight attendants) are taxable by California if more than 50% of the individual's schedule flight time is in California.

A merchant seaman who is in California only because this state is a port-of-call and who maintains no other contact or connections with this state, is not considered a resident.

There are many factors you can use to help you determine your residency status. For example, the location of your principal residence and location of your spouse and children is a factor to consider. The state in which you are registered to vote, where your license was issued and where your vehicles are registered and the location of your social ties, such as your place of worship, professional associations, or social and country clubs of which you are a member are very important factors.

Any individual who is a California resident for part of the year and a nonresident for part5 of the year is a part-year resident.

A safe harbor is available for certain individuals leaving California under employment-related contracts. The safe harbor provides that an individual domiciled in California who is outside California under an employment-related contract for at least 546 consecutive days will be considered a nonresident unless the individual has intangible income exceeding $200,000 in any taxable year during which the employment-related contract is in effect or the principal purpose of the absence from California is to avoid personal income tax.

Students who are residents of California leaving to attend an out-of-state school would not automatically become nonresidents and students who are nonresidents of California coming to this state to attend a California school would not automatically become residents.

You lived and worked in Kansas. You retired in Kansas and received your first pension check on January 1, 2011. You moved permanently to California on July 1, 2011. You pension income received beginning July 1, 2011 is taxable by California because California residents are taxed on all income, regardless of source.

It is important for California income tax purposes that you make an accurate determination of your residency status. Residency is primarily a question of fact to be determined by examining all the circumstances of your particular situation.

You are a resident of Nevada. You own residential rental property located in California. Your property has always shown a loss. You sold the property at a gain. Although you are a resident of Nevada, the gain on the sale is taxable in California because the property is located in California.

You can have only one domicile at a time. Once you acquire a domicile, you retain that domicile until you acquire another one. A change of domicile requires abandonment of your prior domicile, physically moving to and residing in the new locality and the intent to remain in the new locality permanently.

Maintain separate property separately. If the property or the income from the property is used for community purposes, or commingled, it could lose its separate property character, overriding any agreements. Separate property is property owned separately by the husband or wife before marriage or registering as a domestic partnership, property received separately as gifts or inheritances or property that is declared separate property in a valid agreement.

If you paid taxes to California and another state on the same income, you may qualify for a tax credit for taxes paid to another state.

Tax Topic CA 1 - Filing a California Tax Return

Copyright © 2012 [Hera's Income Tax School]. All rights reserved.
Revised: 11/16/14

Tax Topic CA 1 - Filing a California Tax Return

Copyright © 2012 [Hera's Income Tax School]. All rights reserved. Revised: 11/16/14

Copyright © 2012 [Hera's Income Tax School]. All rights reserved.
Revised: 11/16/14