CA Exemption Credit & Phaseout Thresholds
California residents must pay close attention to exemption credits during tax time. In the chart above, you can see exemption amounts for tax years 2018 until now. Higher-income taxpayers should be aware of the state's exemption phaseout rules, which are further explained below.
Phase-out - The California credits are reduced $6 ($12 for Joint and SS) for every $2,500 ($1,250 for MS) or part thereof that the federal AGI exceeds the California threshold amounts.
Example - CA Exemption Phase Out - Susan files as a single taxpayer with one dependent. Her 2023 federal AGI is $244,676. Her exemption credits and phase out for 2023 is computed as follows:
| Federal AGI | $244,676 |
| Phase-out threshold | <237,035> |
| Balance (not less than zero) | 7,641 |
| Increments of $2500: 7,641/2,500 = 3.06 Must round up so it is 4 | |
| Phase-out amount: 4 x $6 = $24 | |
| Susan's personal exemption credit | 144.00 |
| Less phase-out amount | <24.00> |
| Personal exemption credit allowed | 120.00 |
| Susan's dependent exemption credit | 446.00 |
| Less phase-out amount | <24.00> |
| Dependent exemption credit allowed | 422.00 |
| Total exemption credits allowed | 542.00 |