For the first time ever, the state is giving teachers credit where credit is due - on their income tax forms.
Assembly Bill 2879, enacted July 5, adds the Teacher Retention Tax Credit to the list of credits that can be used to reduce regular taxes. This act, introduced by Assembly Member Hannah Beth Jackson (D-Santa Barbara), allows a tax credit for credentialed teachers based upon the years of service as a credentialed teacher. The credit amount varies as follows:
- At least four but less than six years - $250.
- At least six but less than 11 years - $500.
- At least 11 but less than 20 years - $1,000.
- 20 or more years - $1,500.
A "credentialed teacher" is defined by the State Franchise Tax Board as a person who holds a preliminary or professional clear credential as determined by the California Commission on Teacher Credentialing. Those eligible for the credit must also teach at a "qualifying educational institution," defined as any public or private elementary, secondary or vocational-technical school located in California, "including any federal agency or instrumentality providing such education at any location within the state" (for example, an Indian reservation or a military installation).
The credit cannot exceed 50 percent of the amount of tax that would be imposed on the teacher's salary, excluding pensions or other deferred compensation, after application of the standard deduction or itemized deductions. Excess credit amounts may not be carried forward.
"We're still trying to work through some issues and are involved in amending and cleaning up the bill," says Denise Azimi, assistant public affairs officer at the Franchise Tax Board.
The tax credit does not cover school administrators or credentialed teachers working in non-teaching positions. It also does not include school counselors, psychologists or nurses, says Azimi. And teachers who receive a stipend for jobs not related to their certification, such as coaching a sports team, may not include that experience or portion of their salary toward the tax credit.
For more information about AB 2879, contact the Franchise Tax Board Legislative Services Bureau (916) 845-5472, or visit the Web site http://www.ftb.ca.gov/