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| In tax year 2014, to qualify for the California child and dependent care expenses credit, your federal adjusted gross income must be $100,000 or less. |
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If your income for California is over $100,000, then you don't qualify for any child and dependent care credit. The $100,000 limit amount is only for California and not for federal. You still get a child and dependent care expenses credit for federal purposes if your income goes over $100,000. This credit amount for federal would be 20 percent of the qualifying amount paid. Therefore, look at the percentage limits carefully when calculating your child and dependent care expenses credit. Just because you receive a credit for federal, does not necessarily mean you will receive one on your California tax return. You already know that though, we don't have to tell you. Once you fill out IRS form 2441 and the Franchise Tax Board form 3506, you will see the limitations. You can use these two forms as worksheets and eventually after many calculations, all of this will be ingrained in your mind. |
| In tax 2014, 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 $75,536. |
| Another credit which was previously refundable but now it is nonrefundable, is the renter's credit. To qualify for the renter's credit your must have been a California resident for the entire year and your California adjusted gross income (AGI) must have been $37,768 or less if you are single, or married filing separately. Your California income must have been $75,536 or less if you are married filing jointly, head of household or if you are qualifying widow (widower). The property for which you paid rent must not have been exempt from property tax. You must have paid rent for at least half the year for a property which was your principal residence. The renter's credit amounts are $60 for a single or married filing separate individual or $120 for individuals who file as head of household , married filing jointly, or as qualifying widow or widower. |
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You must have not, as with most credits, not have been able to be claimed on someone else's tax return as a dependent. If for more than half of the year, you lived in the home of a parent, foster parent, or legal guardian in 2014 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. |
| The nonrefundable renter's credit, as with the other credits, must be carefully substantiated. With the California nonrefundable renter's credit it is little simpler as it basically only requires that you answer a few questions as to the qualifications. There is a qualification record which you must fill out and keep for your records. If you are preparer, you should be able to present this qualification record to the Franchise Tax Board individual inquiring about how you determine that the taxpayer qualified for the renter's credit. As with other credit, you must ask the right questions to make sure your client qualifies for the nonrefundable renter's credit. For most of us, the computer produces a qualification record automatically. However, we cannot just tell an auditor that the computer created the qualification record automatically. You must make sure you ask the taxpayer the questions presented in the qualification record. Otherwise, what good is it for? It does nobody any good to just print the qualification record. |
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One of the main qualification questions to be concerned with is that the taxpayer paid rent for a least 6 months of the year. To qualify for renter's credit, you must have paid rent for at least 6 months of the tax year and your principal resident must have been in California. |
| If your filing status was married filing separate, you are still able to claim the California renter's credit. |
| Copyright © 2014 [Hera's Income Tax School]. All Annual Federal Tax Refresher Course rights reserved. |
| Revised: 07/09/15 |
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