Changes to Your California State Withholding Tax Coming in November, 2009

Changes to Your California State Withholding Tax Coming in November, 2009

Technically, it’s not a tax increase, even though it may feel like one when your next paycheck arrives. As part of a bundle of budget patches adopted in the summer, the state is taking more money now in withholding, even though workers’ annual tax bills won’t change.

Think of it as a forced, interest-free loan: You’ll be repaid any extra withholding in April. Those who would receive a refund anyway will receive a larger one, and those who owe taxes will owe less.

The Auditor/Comptroller’s office sent MEA the following message:

“AB17, which was enacted by the California legislature, will increase payroll state withholding taxes by approximately 10 percent effective November 1, 2009.  This increase will be reflected on the check you receive on November 13, 2009.”