Certified Specialist In Taxation Law

(July 24, 2000)

For taxable years beginning on or after January 1, 2000, qualified credentialed teachers will be allowed a nonrefundable, noncarryover credit ranging from $250 to $1,500 depending upon the years of service as a teacher (AB 2879, Ch. 00-75) (R&TC Sec. 17052.2). The credit amount varies as follows:

The teachers' retention credit is capped at 50 percent of the amount of tax that would be imposed on the teacher's salary, excluding pensions or other deferred compensation, after applying the standard deduction or itemized deduction(s). The calculation for the credit limitation is complex, and requires teachers to determine their tax liability twice—once including the teaching income and once excluding the teaching income.

According to the FTB, only those teachers who are actively teaching and who hold a preliminary or professional clear credential as determined by the Commission on Teacher Credentialing may qualify for this credit. This credit does not apply to administrators, counselors, coaches and others who are not performing teaching duties. Because of the ambiguities in this law, there may be clean-up legislation.

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For questions or comments regarding this web site Michael D. Daniels

                    Last modified: January 14, 2008