Error on State Tax Form for IRA Income Phase Out Amount

Californians Encouraged to Check FTB Website for Updates and
Corrections to Forms
SACRAMENTO, Calif.--(Business Wire)--
The Franchise Tax Board (FTB) advises taxpayers looking to make an
IRA deduction to ensure that they are using the updated state tax
forms. The deadline for contributions to a traditional IRA for the
year is the due date of the tax return, generally April 15.

Specifically, FTB corrected instructions to Schedule CA (form 540)
line 32 regarding the income phase-outs for traditional IRA deductions
for joint and qualifying widow(er) tax filers. To find the corrected
instructions, visit the FTB website at www.ftb.ca.gov and search using
the key words "540 CA Instructions."

Taxpayers who make IRA contributions can take a state tax
deduction if they meet certain requirements. For individuals who are
covered by an employer retirement plan, the IRA deduction is reduced
(phased-out) when income exceeds certain limits. For the joint and
qualifying widow(er) filing status, the correct adjusted gross income
phase-out amount range is $80,000-$100,000. Prior to February 28,
2008, FTB mistakenly had the phase-out income range at
$75,000-$85,000.

When FTB discovered the error in February, forms and instructions
were immediately updated on the website, the error was noted on the
forms update page, and all computerized tax processors who work with
tax preparation professionals were alerted.

Taxpayers planning to take this deduction need to make sure to use
the corrected form instructions, which shows a revision date of
February 2008 or later, or check with their tax professional or
preparation software. Anyone who filed and missed taking this
deduction due to the error should file an amended state tax return.

FTB reminds everyone to check for updates or corrections to any
form that pertains to you. As updates and corrections are made to
California tax forms, FTB posts the changes on its website. To access
updates, use keyword search "forms updates."

For more information about state tax filing, FTB encourages
taxpayers to visit its website to download up-to-date tax forms, get
answers to frequently asked questions, and find information about
e-file, including FTB's no cost CalFile.

Franchise Tax Board
Public Affairs Office, 916-845-4800
John Barrett, 916-825-8814 (Cell)
Holly McDonell, 818-968-2374 (Cell)

Copyright Business Wire 2008