An increase in California's personal income tax rate could mean some employees owe taxes at the end of the year.

The California Employment Development Department (EDD) recently increased personal income tax rates for 2009 by one quarter of one percent (.0025).

Although the higher rate took effect in January, the state did not release its revised tax tables until recently. UC's payroll system will implement the new tax rates beginning with July 2009 earnings. That six-month delay could mean some employees have not withheld enough taxes during the first half of the year.

You can review the California State Form DE-4, "Employee Withholding Allowance Certificate" posted on the Payroll Coordination and Tax Services website to determine if you need to increase the amount of state tax withheld in order to avoid owing taxes at the end of the year. This form includes instructions about estimating your state income tax liability on an annual basis using the new tax rates.

If you determine that you will not have enough state income withheld, you can increase the amount of your state income tax withholding by reducing the number of exemptions you claim for state purposes or by having extra money deducted from your paycheck for state income taxes. You would need to complete a new UC W-4/DE 4 to make either of these changes or you can change your state tax withholding on line, by signing in to your personal account on At Your Service.

For more information about the new tax rates, visit the California EDD website.