TAXES 18-05, California State Income Tax Withholding

Published: January 16, 2018
Effective: Pay Period 01, 2018

Summary

The income tax withholdings for the State of California will change as follows:

The low income exemption amount for Single and Married with zero (0) or one (1) allowance will increase from $13,687 to $14,048.
The low income exemption amount for Married with two (2) or more allowances and Head of Household will increase from $27,373 to $28,095.
The standard deduction for Single and Married with zero (0) or one (1) allowance will increase from $4,129 to $4,236.
The standard deduction for Married with two (2) or more allowances and Head of Household will increase from $8,258 to $8,472.
The Single and Married withholding tables have changed.
The annual personal exemption credit will increase from $122.10 to $125.40.

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 or 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 and 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. 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. 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, 2018)

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 (e.g., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the gross annual wages.
Determine if the employee's gross salary 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

$14,048

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

$14,048

Married Claiming two (2) or more exemptions¹

$28,095

Head of Household

$28,095

¹Number 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	$4,236
Married Claiming zero (0) or one (1) exemption¹	$4,236
Married Claiming two (2) or more exemptions¹	$8,472
Head of Household	$8,472

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

Single Tax Withholding Table

Taxable Wages	Amount of Tax
Over $0 but not over $8,223	1.1%
Over $8,223 but not over $19,495	$90.45 plus 2.2% of excess over $8,223
Over $19,495 but not over $30,769	$338.43 plus 4.4% of excess over $19,495
Over $30,769 but not over $42,711	$834.49 plus 6.6% of excess over $30,769
Over $42,711 but not over $53,980	$1,622.66 plus 8.8% of excess over $42,711
Over $53,980 but not over $275,738	$2,614.33 plus 10.23% of excess over $53,980
Over $275,738 but not over $330,884	$25,300.17 plus 11.33% of excess over $275,738
Over $330,884 but not over $551,473	$31,548.21 plus 12.43% of excess over $330,884
Over $551,473 but not over $1,000,000	$58,967.42 plus 13.53% of excess over $551,473
Over $1,000,000	$119,653.12 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 $16,446	1.1%
Over $16,446 but not over $38,990	$180.91 plus 2.2% of excess over $16,446
Over $38,990 but not over $61,538	$676.88 plus 4.4% of excess over $38,990
Over $61,538 but not over $85,422	$1,668.99 plus 6.6% of excess over $61,538
Over $85,422 but not over $107,960	$3,245.33 plus 8.8% of excess over $85,422
Over $107,960 but not over $551,476	$5,228.67 plus 10.23% of excess over $107,960
Over $551,476 but not over $661,768	$50,600.36 plus 11.33% of excess over $551,476
Over $661,768 but not over $1,000,000	$63,096.44 plus 12.43% of excess over $661,768
Over $1,000,000 but not over $1,102,946	$105,138.68 plus 13.53% of excess over $1,000,000
Over $1,102,946	$119,067.26 plus 14.63% over $1,102,946

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 $16,457	1.1%
Over $16,457 but not over $38,991	$181.03 plus 2.2% of excess over $16,457
Over $38,991 but not over $50,264	$676.78 plus 4.4% of excess over $38,991
Over $50,264 but not over $62,206	$1,172.79 plus 6.6% of excess over $50,264
Over $62,206 but not over $73,477	$1,960.96 plus 8.8% of excess over $60,206
Over $73,477 but not over $375,002	$2,952.81 plus 10.23% of excess over $73,477
Over $375,002 but not over $450,003	$33,798.82 plus 11.33% of excess over $375,002
Over $450,003 but not over $750,003	$42,296.43 plus 12.43% of excess over $450,003
Over $750,003 but not over $1,000,000	$79,586.43 plus 13.53% of excess over $750,003
Over $1,000,000	$113,411.02 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 = $125.40 x Number of Regular Allowances Claimed on DE-4 or W-4.
Divide the annual California tax withholding calculated in step 8 by the number of pay dates in the tax year to obtain the biweekly California income tax withholding.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) homepage. Select the Publications tab and select U.S. Income Tax Formulas from the Publications menu to launch the tax map. Select the desired State from the map provided for the formula.

Previous Tax Bulletin

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