California Tax: Disabled Veterans' Exemption Increases for 2011

Revenue and Taxation Code section 205.5 provides that the exemption amounts and the household income limit for the disabled veterans' exemption shall be compounded annually by an inflation factor. Specifically, subdivisions (g) and (h) of section 205.5 provide that, for each assessment year, the inflation factor shall be the annual percentage change, measured from February to February of the two previous assessment years, rounded to the nearest one-thousandth of 1 percent, in the California Consumer Price Index (CCPI) for all items, as determined by the California Department of Industrial Relations.

Information from the Department of Industrial Relations shows that the CCPI increased from 222.181 in February 2009 to 225.626 in February 2010. Rounded to the nearest one-thousandth of 1 percent, this is an increase of 1.551 percent (factor of 1.01551).

Applying this factor to the 2010 tax exemption amounts of $115,060/$172,592 results in 2011 tax exemption amounts of $116,845/$175,269.

Applying this factor to the 2010 household income limit of $51,669 results in a 2011 household income limit of $52,470.

For your information, the exemption amounts and household income limits for prior years are enclosed. The disabled veterans' exemption forms (BOE-261-G and BOE-261-GNT) have been updated and will be mailed with the other Board-prescribed forms. Please call our Assessment Services Unit at 916-445-4982 if you have any questions regarding this tax exemption.