What's New in 2024 for California?
The state of California has made several important tax law changes for the 2024 tax year. Here’s a summary of the key updates:
Wildfire Relief Payment
The Federal Disaster Tax Relief Act of 2023 allows a deduction for any amount received by an individual as a qualified wildfire relief payment. However, California law generally does not conform to this federal provision. If any qualified amount was excluded from income for federal purposes and California law does not provide a similar exclusion, you must include that amount in income for California purposes [1].
Wildfire Mitigation Payment
Starting with tax year 2024, California allows an exclusion from gross income for any amount received as a California qualified wildfire loss mitigation payment through the California Wildfire Mitigation Financial Assistance Program [1].
Net Operating Loss (NOL) Suspension
California has suspended the net operating loss carryover deduction starting with tax year 2024. This means taxpayers will not be able to carry over NOLs to future years [1].
Earned Income Tax Credit (EITC) Updates
California has updated the income thresholds for the Earned Income Tax Credit (EITC). Taxpayers with wage income earned in California and/or net earnings from self-employment of less than $31,951 may qualify for the EITC [2].
Young Child Tax Credit (YCTC)
The Young Child Tax Credit (YCTC) reduces your California tax obligation or allows a refund if no California tax is due. You may qualify for the credit if you qualified for the California EITC or would have been allowed the California EITC but have earned income of zero dollars or less, and have at least one qualifying child who is younger than six years old as of the last day of the taxable year [2].
Foster Youth Tax Credit (FYTC)
The Foster Youth Tax Credit (FYTC) reduces your California tax obligation or allows a refund if no California tax is due. You may qualify for the credit if you qualified for the California EITC, are aged 18 to 25, were in foster care while 13 years of age or older, and were placed through the California foster care system [2].
Additional Information
For more detailed information on these changes, you can refer to the official California tax law updates or consult with a tax professional. TaxSlayer strives to provide accurate and timely information, but always review additional state and federal resources as needed.
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