July 31, 2009

UNIVERSITY OF CALIFORNIA, RIVERSIDE EMPLOYEES

REVISED CALIFORNIA STATE INCOME TAX TABLES

As a result of the current State budget, the California Employment Development Department (EDD) recently issued revised personal income tax tables which increase personal income tax withholding applicable to earnings paid on or after January 1, 2009.  The new rates represent a one quarter of one percent (.0025) increase in the old tax rates.  For example, if the old rate was 1.0%, the new rate is 1.25%.

In order to accommodate the rate changes, the Payroll Personnel System (PPS) was modified to accommodate an additional data space that the new tax rates require.  Therefore, the new tax rates are effective with paychecks issued on:

July 31, 2009 - Monthly Current (MO)
August 7, 2009 - Monthly Arrears (MA)

However, the revised rates apply to all earnings in 2009, beginning January 1, 2009, and it is possible that you may owe taxes at the end of the year.  To determine if you will need to increase the amount of state tax withheld in order to avoid owing taxes at the end of the year, please review the California State Form DE-4 "Employee Withholding Allowance Certificate" available at http://www.ucop.edu/ucophome/cao/paycoord/ucw4-de4.pdf.  This form includes instructions about estimating state income tax liability on an annual basis using the new tax rates.

If you determine that you will not have enough state income tax withheld, you can increase the amount of your state income tax withholding by:

• reducing the number of exemptions you claim for state purposes or

• by having extra money deducted for state income taxes from your paycheck

You can change your state tax withholding online by signing in to your personal account on At Your Service at https://atyourserviceonline.ucop.edu/ayso/.

For additional information about California personal Income Tax, go to the Franchise Tax Board website at www.ftb.ca.gov.

For more information about the new tax rates or for copies of the withholding schedules, go to the EDD website at www.edd.ca.gov.

If you have any question about this issue, please contact:

Payroll Supervisor - roberta.nardico@ucr.edu or

Payroll Director - gabe.nwandu@ucr.edu