2020-52: Possible California tax increases coming - Spidell

2020-52: Possible California tax increases coming

AB 1253 (Santiago) is not law yet, but if enacted the bill would impose the following additional taxes retroactively for taxable years beginning on or after January 1, 2020:

  • 1% on income over $1,181,484, but not over $2,362,968;
  • 3% on income over $2,362,968, but not over $5,907,420; and
  • 3.5% on income over $5,907,420.

These increases would mean the California tax rate on income over $1 million would go from 13.3% to 14.3%, and California’s maximum rate would increase to a staggering 16.8%.

Although the bill initially sets $1 million, $2 million, and $5 million as the thresholds, later in the bill those numbers are increased for inflation.

The bill is now pending a hearing in the Senate Governance and Finance Committee, and requires a two-thirds vote of both houses of the Legislature to be enacted.

To view the full text of AB 1253, go to:


Sign up for Spidell’s 2020/21 Federal and California Tax Update webinar and let us simplify your tax season. Multiple dates and times are available. Click here for details.

Sign up for Spidell’s Flash E-mail — Get breaking news delivered to your inbox, plus other free analysis and information for tax professionals. Join our community and stay at the top of your game. Click here to sign up.