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Year 2000 California Tax Changes
2008 California Tax Changes
Overview
The following information regarding California payroll
tax changes is effective January 1, 2008.
For the 2008 calendar year, these changes include the following:
Increase in the State of California Standard Deduction
The standard deduction for the State of California for 2008 increases to $3,516
for Single, and $7,032 for Married/Head of Household. You can update these
fields yourself on the Custom Screen (option "U") of the "CA" (California)
record of the Tax Data File--see the sample screen that follows. (Reference:
"2008 California Employer's Guide", DE44, Table 3.)
Increase in the State of California Low Income Exemption
The low income exemption for the State of California for 2008 increases to
$11,630 for Single, and $23,259 for Married/Head of Household. You can update
these fields yourself on the Custom Screen (option "U") of the "CA" (California)
record of the Tax Data File--see the sample screen that follows. (Reference:
"2008 California Employer's Guide", DE44, Table 1.)
Increase in the State of California Personal Exemption Credit
The personal exemption credit for the State of California for 2008 increases to
$94 per allowance. You can update these fields yourself on the Custom Screen
(option "U") of the "CA" (California) record of the Tax Data File. (Reference:
“2008 California Employer’s Guide”, DE44, Table 4.)
No Change in the State of California Unemployment Wage Limit
The California Unemployment wage limit for 2008 remains unchanged at $7,000.
The California Unemployment Contribution rate, however, varies from company to
company, from 1.5% to 6.2%. The Employment Training Tax rate for 2008 remains
at 0.1%. Refer to your Form DE-2088 that you receive from the State of
California Employment Development Department (EDD) for your contribution rates
for Unemployment Insurance and Employment Training Tax. Add these two rates
together, and enter the sum as a decimal number for the employer unemployment
rate. For example, if your DE-2088 indicates an Unemployment Contribution rate
of 3.4% and an Employment Training Tax (ETT) rate of 0.1%, the total rate would
be 3.5% or .03500 expressed as a decimal. Keep the "UNEMPLOYMENT TAX WAGE
LIMIT" of the "CA" (California) record of the Tax Data File as 7000.00; the
"UNEMPLOYMENT EMPLOYEE TAX RATE" is 0.00000, and the "UNEMPLOYMENT EMPLOYER TAX
RATE" would be 0.03500, in the example I've just described--but your rate will
probably be different. (If you have any questions on what your Unemployment
rates should be, you can contact EDD Taxpayer Assistance Center at
888.745.3886.)
Increase in the State of California Disability Wage Limit for 2008
The California Disability Insurance (SDI) wage limit for 2008 increases to
$86,698. Change the "DISABILITY TAX WAGE LIMIT" of the "CA" (California) record
of the Tax Data File to 86698.00. (Reference: "Notice of Contribution Rates and
Statement of UI Reserve Account for Calendar Year 2008”)
Increase in the State of California Disability Tax Rate for 2008
The California Disability Insurance (SDI) contribution rate for 2008 increases
to 0.8%. Change the "DISABILITY EMPLOYEE TAX RATE" to 0.00800; the "DISABILITY
EMPLOYER TAX RATE" is 0.00000. (Reference: “Notice of Contribution Rates and
Statement of UI Reserve Account for Calendar Year 2008”.)
No Change in California Deduction for Additional Allowances
The Estimated Deduction for Additional Withholding Allowances remains at $1,000
per allowance. (Reference: “2008 California Employer’s Guide”, DE44, Table 2.)
New California Withholding Tables
Following this notice are sample screens with the withholding rates for 2008.
These changes should be made to the "CA" (California) record of the Tax
Parameter File. You must access the Single, Married, and Head of Household)
screens individually. (Reference: “2008 California Employer’s Guide”, DE44,
Table 5.)
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