Wednesday, Feb. 03, 2010

State tax law changes

Federal tax law brought quite a few changes this year, but your state return won't require as much heavy lifting - and many of its changes are tied to the federal return, The N&O's Mary Cornatzer reports.

The biggest surprise will be on Line 15 of your state form: You'll be asked to figure out the surtax you owe. Depending on your income, the surtax could be either 2 or 3 percent of the amount on line 14.

You'll owe a 2 percent surtax if you make: $60,000 up to $150,000 and your filing status is single; $80,000 up to $200,000 with head of household status; $100,000 up to $250,000 with married filing jointly status; $50,000 up to $125,000 with married filing separately status. Below those minimums you don't pay a surtax. Above those maximums you pay 3 percent.

One change that parallels the federal tax law is with the refundable Earned Income Tax Credit. If you owe state income taxes, the EITC can reduce what you owe. If you're getting a refund, the EITC is in addition to that. Your income last year could be as much as $43,279 if you have three or more kids, or $48,279 if married filing jointly. (The income adjusts down with fewer children.) The state has increased its earned income credit to 5 percent of the federal credit. And if you qualify for the federal credit, you qualify for the state's.

Congress passed a law this month making it possible to deduct money donated after Jan. 11 and before March 1 to qualified charities working to bring aid to Haiti. You can deduct it on your state return, too.