California AGI Phase-Out Limits for Traditional IRAs

Although California conforms to the federal Roth IRA AGI phase-out amounts, California does not conform to federal law that indexes the AGI phase-out limits for traditional IRAs beginning in 2008 for taxpayers who are active participants in their or their spouses' employer-sponsored retirement plan. Therefore, taxpayers participating in their or their spouses' employer-sponsored retirement plan could potentially have a different federal basis than state basis if they fall between the phase-out limits, and are contributing to a traditional IRA beginning in the 2008 taxable year.

For 2008, the phase-out range for federal purposes for single taxpayers is between $52,000 and $62,000, whereas the range for California personal income tax purposes remains between $50,000 and $60,000. The AGI phase-out range for joint federal returns is $83,000 to $103,000, as compared to the California phase-out range of between $75,000 and $85,000. Finally, for individuals who are not an active participant, but whose spouse is an active participant, the phase-out range is between $156,000 and $166,000 on the federal return and between $150,000 and $160,000 on the California return.