For California, the tax instruction booklet says that you need to file the income tax forms if your income is over $17,693 "gross" or $14,154 "adjusted".

However, the state's standard deduction is only $4,401!

So this leads to a seemingly bizarre situation that if your income is, say, $10,000, you have a tax liability, but don't actually have to file a return.

What am I missing here?


You are forgetting the exemption credits. An adjusted gross income of $14,154, subtracting the standard deduction of $4,401, leaves a $9,753 taxable income, which for the Single filing status results in a tax of $111 (from the Form 540 tax table). Then you subtract the $118 exemption tax credit for Single with no dependents, and you have 0 tax.

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