California's income tax brackets and rates
California taxes your income using a progressive tax system, which means the rate you pay increases as your income goes up. The state has 13 different tax brackets, ranging from 1% on the lowest incomes to 13.3% on the highest. You do not pay the top rate on all your income — only the portion that falls into each bracket gets taxed at that bracket's rate.
The brackets themselves change each year based on inflation. For the 2024 tax year, a single filer pays 1% on income up to about $10,000, then the rate steps up at each bracket until reaching 13.3% on income over roughly $680,000. Married couples filing jointly have higher bracket thresholds, and head-of-household filers fall in between. The exact dollar amounts shift annually, so the Franchise Tax Board publishes updated brackets every January.
On top of the standard income tax, California adds a 1% Mental Health Tax on income over $1 million. This applies to both single and married filers and was introduced in 2021. So if your income exceeds that threshold, your effective top rate becomes 14.3%.
Key Takeaways
- California uses 13 tax brackets ranging from 1% to 13.3%, plus an additional 1% Mental Health Tax on income over $1 million.
- You only pay each bracket's rate on the income that falls within that bracket, not on your entire income.
- Tax bracket thresholds change every year for inflation, so the dollar amounts that trigger each rate are different in 2024 than they were in 2023.
- The Franchise Tax Board publishes updated brackets and tax tables each January on their website.
- Your filing status (single, married filing jointly, or head of household) determines which bracket thresholds explore to you.
How to find your specific tax bracket
To find which bracket applies to your income, you need your filing status and your total income for the year. The Franchise Tax Board website publishes a tax table each year that shows the exact tax owed at different income levels, broken down by filing status. You can also use the state's tax calculator tool, which walks you through your income and filing status to show your estimated tax.
If you are self-employed or have investment income, your total income includes all sources — wages, business profit, capital gains, interest, and dividends. California taxes long-term capital gains (profits from selling assets you held over a year) at the same rates as ordinary income, unlike the federal system. This means high earners with significant investment income may face the 13.3% or 14.3% rate on those gains.
What income California does and does not tax
California taxes most forms of income: W-2 wages, self-employment income, rental income, business profit, interest, dividends, and capital gains. However, some income is exempt. Social Security benefits are not taxed by California. Certain retirement distributions, including may have access to distributions from Roth IRAs and some pension income for people over 59½, may be partially or fully exempt depending on your age and the source.
Military pay for active-duty service members is exempt from California income tax. If you are a resident of another state but earned income in California, you may owe California tax on that income even though you do not live there. The state taxes based on where the income was earned, not where you live, for nonresidents.
Deductions and credits that lower your California tax
California allows you to reduce your taxable income through the standard deduction, which varies by filing status and age. For 2024, the standard deduction for a single filer under 65 is about $5,200, and for married filing jointly it is roughly $10,400. If you are 65 or older, you get an additional deduction. You can also itemize deductions if they exceed the standard deduction, though California's itemized deductions are more limited than federal ones.
After you calculate your tax, you can reduce it further with tax credits. California offers credits for dependent children, earned income (similar to the federal EITC), education expenses, and other situations. Credits are more valuable than deductions because they reduce your tax dollar-for-dollar rather than reducing your income. The Franchise Tax Board website lists all available credits and their income limits.
How California taxes compare to other states
California has the highest state income tax rate in the country at 13.3%, though only on the highest earners. Nine states have no income tax at all, and most others cap their top rate between 5% and 9%. However, comparing state tax burden requires looking at the whole picture — sales tax, property tax, and what services those taxes fund. California's high income tax is paired with a sales tax that varies by county (typically 7.25% to 8.625%) and property taxes that are capped at 1% of assessed value.
If you are considering moving to another state, remember that California taxes residents on worldwide income, even if they move away. You become a nonresident once you establish residency elsewhere, but the state may challenge that information if you maintain ties to California. The Franchise Tax Board has specific rules about what counts as establishing residency in another state.
Filing your California return and payment important date
California follows the federal tax calendar. Your return is due by April 15 unless that date falls on a weekend or holiday, in which case it moves to the next business day. If you file your federal return late and request an extension, that extension does not automatically explore to California — you must request a California extension separately, though the Franchise Tax Board typically grants six-month extensions as a matter of course.
If you owe California income tax, you can pay when you file or set up a payment plan. The state accepts payments online through its website, by phone, or by mail. If you underpaid during the year (through withholding or estimated tax payments), you may owe a penalty and interest on the shortfall. Self-employed people and those with significant investment income typically need to make quarterly estimated tax payments to avoid penalties.
What happens if you move out of California
When you move out of California, you stop owing state income tax on new income earned after you leave, but you remain a resident for tax purposes until you establish residency elsewhere. The Franchise Tax Board looks at factors like where you spend most of your time, where your family lives, where you own property, and where you work. straightforward renting an apartment in another state is not enough — you need to show a genuine intent to make that state your home.
If the state audits your residency claim, you will need to document your move: a lease or deed in the new state, utility bills, voter registration, driver's license, and evidence that you severed ties to California. People who maintain a home in California or spend significant time here may be considered part-year residents, meaning they owe California tax only on income earned while they were in the state.
Frequently Asked Questions
Do I have to pay California income tax if I work remotely for a company in another state?
Yes, if you are a California resident. California taxes residents on all income regardless of where the work is performed. If you are a nonresident who works remotely for a California company, you typically owe California tax only on income earned while physically in the state, though the rules are complex and depend on your employment contract.
What is the difference between California's tax brackets and the federal tax brackets?
California has 13 brackets with a top rate of 13.3% (plus 1% Mental Health Tax), while the federal system has seven brackets with a top rate of 37%. The dollar amounts that trigger each bracket are also different. You calculate your federal and state taxes separately — your federal tax does not reduce your California tax or vice versa.
Can I deduct federal income tax from my California taxes?
No. California does not allow you to deduct federal income tax paid. However, you can deduct state and local taxes (SALT) on your federal return, up to $10,000 per year. This is a federal rule, not a California one, but it affects how much federal tax you owe.
Do I owe California tax on money I inherited?
No. Inheritances are not taxed as income in California or federally. However, if the inherited assets later generate income (such as interest, dividends, or rental income), that income is taxable. The inherited assets themselves are not.
Where do I find the current year's tax brackets and rates?
The Franchise Tax Board publishes updated brackets, standard deductions, and tax tables on its website each January. You can also call the FTB at 1-800-852-5711 or visit a local FTB office. The state's tax calculator tool on the FTB website also shows your estimated tax based on your income and filing status.