TAXES 16-07, California State Income Tax Withholding

Published: February 18, 2016
Effective: Pay Period 01, 2016

Summary

This bulletin supersedes TAXES 16-04, California State Income Tax Withholding dated January 11, 2016. The married tax table value has changed from $4991.36 plus 10.23% over $103,080 to $4991.36 plus 10.23% over 103,060.

All other information remains the same and is listed below.

The income tax withholding formula for the State of California includes the following changes:

The low income exemption amount for Single and Married with zero (0) or one (1) allowance will increase from $13,267 to $13,419.
The low income exemption amount for Married with two (2) or more allowances and Head of Household will increase from $26,533 to $26,838.
The standard deduction for Single and Married with zero (0) or one (1) allowance will increase from $3,992 to $4,044.
The standard deduction for Married with two (2) or more allowances and Head of Household will increase from $7,984 to $8,088.
The Single, Married, and Head of Household withholding tables will change.
The annual personal exemption credit will increase from $118.80 to $119.90.

No action on the part of the employee or the personnel office is necessary.

Tax Formula

State Abbreviation:	CA
State Tax Withholding State Code:	06
Acceptable Exemption Form:	DE-4 or W-4
Basis for Withholding:	State or Federal Exemptions
Acceptable Exemption Data:	S, M, H/Number of Regular Allowances/Number of Allowances
TSP Deferred:	Yes
Special Coding:	Determine the Total Number of Allowances Claimed field as follows: First Position - Enter the employee's marital status indicated on the allowance certificate. Enter M (married), S (single), or H (head of household). Second or Third Positions - Enter the total number of regular allowances claimed in Item 1 of the DE-4. If less than 10, precede with a 0 (zero). If no exemptions are claimed, enter 00. Determine the Additional Exemptions Claimed field as follows: First and Second Positions - Enter the number of allowances claimed in Item 2 of the DE-4. If less than 10, precede with a 0 (zero). If no allowances are claimed, enter 00.
Additional Information:	If the employee is using a W-4 in lieu of the California State DE-4, the information for the Additional Exemptions Claimed field should be notated on the W-4.

Withholding Formula (Effective Pay Period 01, 2016)

Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
Subtract the nontaxable biweekly Federal Health Benefits Plan payment(s) (includes dental and vision insurance program and Flexible Spending Account - health care and dependent care deductions) from the amount computed in step 1.
Add the taxable biweekly fringe benefits (i.e., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
Multiply the adjusted gross biweekly wages times 26 to obtain the gross annual wages.
Determine if the employee's gross salaries and wages are less than or equal to the amount shown in the Low Income Exemption Table below. If so, no income tax is to be withheld.
Low Income Exemption Table

Single

$13,419

Married Claiming zero (0) or one (1) exemption¹

$13,419

Married Claiming two (2) or more exemptions¹

$26,838

Head of Household

$26,838

¹ Number of regular allowances claimed on DE-4 or W-4.
Determine the additional withholding allowance for itemized deductions (AWAID) by applying the following guideline and subtract this amount from the gross annual wages.
AWAID = $1,000 x Number of Itemized Allowances Claimed for Itemized Deductions on DE-4 or W-4.

Subtract the standard deduction shown in the Standard Deduction Table below from the result of step 6 to determine the taxable income.

Standard Deduction Table

Single	$4,044
Married Claiming zero (0) or one (1) exemption¹	$4,044
Married Claiming two (2) or more exemptions¹	$8,088
Head of Household	$8,088

¹ Number of regular allowances claimed on DE-4 or W-4.

Single Tax Withholding Table

Taxable Wages	Amount of Tax
Over $0 but not over $7,850	$0.00 plus 1.1% of excess over $0
Over $7,850 but not over $18,610	$86.35 plus 2.2% of excess over $7,850
Over $18,610 but not over $29,372	$323.07 plus 4.4% of excess over $18,610
Over $29,372 but not over $40,773	$796.60 plus 6.6% of excess over $29,372
Over $40,773 but not over $51,530	$1,549.07 plus 8.8% of excess over $40,773
Over $51,530 but not over $263,222	$2,495.69 plus 10.23% of excess over $51,530
Over $263,222 but not over $315,866	$24,151.78 plus 11.33% of excess over $263,222
Over $315,866 but not over $526,443	$30,116.35 plus 12.43% of excess over $315,866
Over $526,443 but not over $1,000,000	$56,291.07 plus 13.53% of excess over $526,443
Over $1,000,000 and over	$120,363.33 plus 14.63% of excess over $1,000,000

Married Tax Withholding Table

If the Amount of Taxable Income Is:	The Amount of California Tax Withholding Should Be:
Over $0 but not over $15,700	$0.00 plus 1.1% of excess over $0
Over $15,700 but not over $37,220	$172.70 plus 2.2% of excess over $15,700
Over $37,220 but not over $58,744	$646.14 plus 4.4 of excess over $37,220
Over $58,744 but not over $81,546	$1,593.20 plus 6.6% of excess over $58,744
Over $81,546 but not over $103,060	$3,098.13 plus 8.8 of excess over $81,546
Over $103,060 but not over $526,444	$4,991.36 plus 10.23% of excess over $103,060
Over $526,444 but not over $631,732	$48,303.54 plus 11.33% of excess over $526,444
Over $631,732 but not over $1,000,000	$60,232.67 plus 12.43% of excess over $631,732
Over $1,000,000 but not over $1,052,886	$106,008.38 plus 13.53% of excess over $1,000,000
Over $1,052,886 and over	$113,163.86 plus 14.63% over $1,052,886

Head of Household Tax Withholding Table

If the Amount of Taxable Income Is:	The Amount of California Tax Withholding Should Be:
Over $0 but not over $15,710	$0.00 plus 1.1% of excess over $0
Over $15,710 but not over $37,221	$172.81 plus 2.2% of excess over $15,710
Over $37,221 but not over $47,982	$646.05 plus 4.4% of excess over $37,221
Over $47,982 but not over $59,383	$1,119.53 plus 6.6% of excess over $47,982
Over $59,383 but not over $70,142	$1,872.00 plus 8.8% of excess over $59,383
Over $70,142 but not over $357,981	$2,818.79 plus 10.23% of excess over $70,142
Over $357,981 but not over $429,578	$32,264.72 plus 11.33% of excess over $357,981
Over $429,578 but not over $715,962	$40,376.66 plus 12.43% of excess over $429,578
Over $715,962 but not over $1,000,000	$75,974.19 plus 13.53% of excess over $715,962
Over $1,000,000 and over	$114,404.53 plus 14.63% of excess over $1,000,000

Determine the tax credit by applying the following guidelines and subtract this amount from the result in step 7.
Tax Credit = $119.90 x Number of Regular Allowances Claimed on DE-4 or W-4.
Divide the annual California income tax withholding by 26 to obtain the biweekly California income tax withholding.

Additional Resources

To view the updated tax formula go to the HR and Payroll Clients page from the MyNFC drop-down menu on the NFC homepage. Click the Publications tab in the center ribbon. Select U.S. Income Tax Formulas from the Publication menu to launch the tax map. Click the desired State from the map provided for the formula.

Inquiries

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