Wednesday, June 24, 2009

State Cuts Tax Exemptions For Kids

On nearly any list of tax tips you will see the very popular child tax credit. However, starting this year California parents will be seeing less money from that deduction then they had in the past. In their efforts to reduce the State’s debt, California lawmakers have reduced the deduction by about $210 per dependent. Check out the following article on the change courtesy of

California parents beware: Those little tax deductions running around the house are now worth less (in a strictly financial sense, of course).

To help balance its budget, California has reduced the state tax credit for dependents.

The change will increase a family's California taxes for 2009 by about $210 per dependent compared with 2008.

A family with one dependent that normally gets a state-tax refund will get back $210 less when they file their 2009 return next year. A family that normally owes money will have to pay $210 more. Multiply that by two or more dependents, and it really adds up.

This may come as a shock to parents who have been too busy shuttling between soccer games and viola lessons to keep up with the state's budget fiasco. The Franchise Tax Board is trying to get the word out, so families can prepare.

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