According to the California Franchise Tax Board, "filing requirement thresholds, the standard deduction, and certain credits were adjusted along with income tax brackets based on the deflation rate of -1.5 percent, as measured by the California CPI for all urban consumers from June 2008 to June 2009. Last year’s inflation rate measured 5 percent. This has only occurred one other time since indexing became law in 1978."

Change in Standard Deduction
The standard deduction will decrease for single or “married filing separate” taxpayers from last year’s rate of $3,692 to $3,637. For joint, surviving spouse, or head of household taxpayers, the standard deduction decreases from $7,384 to $7,274.

Change in Personal Exemption
The personal exemption credit amount for single, separate, and head of household filers will decrease from $99 to $98 and for joint filers or surviving spouses it will decrease from $198 to $196.

Change in Renters Credit
The Renter’s Credit is available for single filers with adjusted gross incomes of $34,412 or less and joint filers with adjusted gross incomes of $68,824 or less.

Change in Dependent Exemption Credit
A new tax law sets the dependent exemption credit for tax years 2009 and 2010 to the indexed personal exemption credit, lowering the credit to $98. Last year’s credit was $309.

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