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01-07-2010, 01:57 PM #1
California's new 'kid tax' hits home
California's new 'kid tax' hits home
Dependent credit slashed more than $200 per child in 2009
By BRADLEY J. FIKES - bfikes@nctimes.com
January 6, 2010 10:40 pm
Got kids? You owe hundreds more in California income taxes this year.
State legislators and Gov. Arnold Schwarzenegger slashed the dependent tax credit from $309 in the 2008 tax year to just $98 in 2009.
Because it's a tax credit, not a deduction, the cut amounts to a dollar-for-dollar tax increase of $211 per child.
While the cut was announced last year as part of California's budget process, it doesn't appear to be widely known, said Robert Skibicki, who said it came to his attention this week while preparing his daughter's tax return.
"When I pulled up the 540 form and saw it (the credit) had dropped from $309 to $98, I thought it was a mistake on the form," said Skibicki, of Lake San Marcos. "I'm an enrolled agent. I know about taxes and I didn't know about this." Enrolled agents can represent taxpayers before the IRS.
Skibicki said it was an unpleasant surprise for his daughter. With two children, the hit to her pocketbook is more than $400.
Families classified as "working poor" will find this especially unwelcome, said Jim Vander Spek, an Escondido-based certified public accountant.
"Most people with one child didn't have to pay any (state) taxes if they made about $35,000 or less" a year, Vander Spek said. "They can expect to start paying this year, which will be a surprise to them."
For those who make more, he said, the financial hit will still be considerable.
"My daughter has three kids, so it's going to be a $600 tax increase for her," Vander Spek said. "My son has two kids and he's going to have a $400 tax increase. It's not insignificant at all."
The dependent credit reduction was part of a deal struck last February to help cut the state's multibillion-dollar deficit, said H.D. Palmer, spokesman for the California Dept. of Finance. The reduction continues through the 2010 tax year, after which the original credit is to be reinstated.
"This is one of the many revenue components of the budget solution that the Legislature adopted," Palmer said.
Palmer said he didn't know where the idea originated.
"But at the end of the day, it was the policy of the California Legislature and signed into law by the governor," he said.
Vander Spek said vehicle owners should also be prepared to pay much higher license fees as a result of the budget deal. Starting last May, the fee rose from 0.65 percent of the vehicle's purchase price to 1.15 percent, nearly doubling. The fee is depreciated annually according to a state formula.
For a vehicle purchased for $15,000, the license fee will rise from $97.50 to $172.50.
The increased fee is being applied as vehicles come up for renewal.
Call staff writer Bradley J. Fikes at 760-739-6641. Read his blogs at bizblogs.nctimes.com.
http://nctimes.com/business/article_269 ... bb994.htmlNO AMNESTY
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01-07-2010, 02:58 PM #2
Re: California's new 'kid tax' hits home
I think there should be NO KICKBACK for having kids.
WHY would there be??? Kids put a larger demand on a town.
Years ago it was good to have all the kids you could to help work the land.
There is no reason now to have more children than you can afford.
I say TAX 'EM for every child after the first one.
Ever noticed the poorer people are the MORE kids they have?If Palestine puts down their guns, there will be peace.
If Israel puts down their guns there will be no more Israel.
Dick Morris
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01-07-2010, 10:05 PM #3
I left California....Yes!!!! Yes!!!! Yes!!!!!
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01-07-2010, 10:38 PM #4"Most people with one child didn't have to pay any (state) taxes if they made about $35,000 or less" a year, Vander Spek said. "They can expect to start paying this year, which will be a surprise to them."Join our efforts to Secure America's Borders and End Illegal Immigration by Joining ALIPAC's E-Mail Alerts network (CLICK HERE)
"
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01-08-2010, 12:58 AM #5
HAHAHAHAHAHA!!! Wait till the Illegals get "Hit Hard" with their Child Tax -- they're going to be "running like the roadrunner toward the border"!!!!!!!!!! HAHAHAHAHAHAHAHAHA!!!!!!!!!!
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01-08-2010, 01:59 AM #6
They will get money for each kid on their federal return and have to pay it to CA.
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