A new tax law raises California’s personal income tax rates by .25 percent.  The law also reduces the dependent exemption credit to the same amount of the personal exemption credit—a $210 difference per dependent using 2008 amounts. Some taxpayers may need to increase their wage withholding now to avoid owing taxes next April.

The Employment Development Department (EDD) made new withholding tables available to employers in April, but taxpayers may be under withheld at least from January through April 2009.

The updated tax tables were issued to Paymaster users in April but you still may be underwitheld as the increase was retro active.

The new withholding tables factor in the changes for the tax rate increase only, so taxpayers claiming dependent exemption credits may still need to modify their wage withholding on Form DE 4, Employee’s Withholding Allowance Certificate, to make any needed changes to the number of allowances they claim.