Carolina is a single taxpayer in California with an AGI of $214,000. What is her exemption credit amount for 2021?

In California, the exemption credit amount for taxpayers can vary based on their adjusted gross income (AGI) and filing status. For the year 2021, the exemption credit begins to phase out for single filers with an AGI exceeding $200,000. The phase-out is at a rate of $50 for each $1,000 of AGI over $200,000.

Since Carolina's AGI is $214,000, she is $14,000 over the threshold. This means her exemption credit is reduced by $700 (which is calculated by multiplying the $14,000 overage by the $50 phase-out rate per $1,000).

The standard exemption credit for a single filer in California for 2021 is $350. If we subtract the $700 reduction from $350, we find that Carolina’s exemption credit amount would indeed be $123.

This answer aligns with how exemption credits work in California, taking into account both the base amount available and the adjustments due to an AGI that qualifies for phase-out.