Effective for taxable years beginning on January 1, 2007, RDPs under California law must file their California income tax returns using either the married/RDP filing jointly or married/RDP filing separately filing status. RDPs will have the same legal benefits, protections and responsibilities as married couples unless otherwise specified.

This is not as easy as it sounds. For Federal purposes, you must report all wages, salaries and other compensation received for your personal services on your own Federal return. Federal tax laws do not allow for the combining of certain individual tax deductions filed on a single return to be combined on a MFJ/RDP tax return.

Because federal income tax law does not allow RDPs to file a joint return, SB 1827 provides a special AGI limitation rule for RDPs filing a joint California return. The law specifies that RDPs filing as MFJ add the AGI amounts from their two separate federal returns and use that total to determine the amount of deductions and credits that are limited by AGIs.

Under current law, 95% of RDPs will pay the same amount of California income taxes as paid by married individuals with identical items of tax reporting. The remaining 5% of RDPs will have a different AGI than married individuals. Consequently, the deductions and credits for those RDPs can be different, some substantially, than the deductions and credit for married individuals with identical items of tax reporting.

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