FTB, focus group explore implications of SB 1827
FTB is already gearing up for a new law that will take effect for tax year 2007, SB 1827 (Migden, D-San Francisco).
SB 1827 requires registered domestic partners (RDP) to use the same state tax filing status as married couples. In 2008, they must choose to file their state tax return as married filing jointly, or married filing separately, using the same standards that apply to married persons under federal law. Under current state and federal law, they use the single or head of household filing status. The new state law has no impact on the federal law.
After Governor Schwarzenegger signed the bill into law in September, FTB quickly established an implementation team to review the various processes, forms, and systems changes needed before January 1, 2008.
We convened a focus group of interested parties, consisting of tax practitioners, the State Bar of California, and domestic partner groups. This group met November 30, to discuss matters related to the legislation for affected taxpayers and tax professionals. We plan to have information from this meeting posted on our Website by January 1, 2007. Some of the issues discussed include:
- How to compute adjusted gross income for state purposes.
- Rules on capital gains from the sale of a home.
Registered domestic partnerships include same-sex partnerships, and heterosexual couples in which one or both partners are age 62 or older. According to the Secretary of State, there were 38,155 RDPs in California as of April 2006. The estimate for the total number of RDPs in California by December 2007 is 40,950.