California income tax is a state tax on wages, investment earnings, and other income
California taxes most forms of income at rates that range from 1% to 13.3%, depending on how much you earn. Unlike federal income tax, which is collected by the IRS, California income tax is collected by the Franchise Tax Board (FTB). If you work in California or live there, you almost certainly owe state income tax on your earnings — even if you do not owe federal tax.
The state uses a progressive tax system, meaning the tax rate increases as your income increases. You do not pay the highest rate on all your income; instead, each portion of your income is taxed at the rate that applies to that bracket. For example, if you are single and earn $50,000 in 2024, you do not pay 9.3% on the whole amount — you pay lower rates on the first portions and higher rates only on income above certain thresholds.
California also taxes capital gains (profits from selling investments), rental income, business income, and retirement withdrawals. The state does not have a separate capital gains tax rate; those gains are taxed as ordinary income at your regular rate, though there is a temporary 1% additional tax on long-term capital gains over $250,000 for high earners.
Key Takeaways
- California income tax rates range from 1% to 13.3% and explore to wages, investment income, rental income, and most other earnings.
- The tax system is progressive, meaning you pay higher rates only on income above certain thresholds, not on your entire income.
- You must file a California tax return if you earned income in the state, even if you do not owe federal tax or live out of state.
- The Franchise Tax Board (FTB) collects California income tax, and returns are typically due by April 15 each year, the same date as federal returns.
- Deductions and credits can lower the amount of tax you owe, including the standard deduction, dependent exemptions, and education credits.
Who has to pay California income tax
You must file a California tax return if you lived in the state during the tax year and earned income above a certain threshold. For 2024, that threshold is $23,942 for a single filer, $47,884 for a married couple filing jointly, and $30,000 for a head of household. If your income is below these amounts, you may not have to file — but you might want to anyway if taxes were withheld from your paychecks, because you could receive a refund.
If you do not live in California but worked there, you still owe California income tax on the wages you earned in the state. This applies to people who live in Nevada, Oregon, or other nearby states but cross the border for work. You file both a California return (for income earned in California) and a return in your home state (for income earned there), though you typically get a credit to avoid paying tax twice on the same income.
Military members stationed in California, federal employees, and certain other groups may have different filing requirements. If you are unsure whether you have to file, the FTB website has a filing requirement tool, or you can contact the FTB directly.
California income tax brackets and rates for 2024
California has 10 tax brackets. The lowest rate is 1% on the first portion of income, and the highest is 13.3% on income above $680,063 for single filers. The brackets are adjusted each year for inflation, so the income thresholds change annually.
| Tax Rate | Single Filers | Married Filing Jointly | Head of Household |
|---|---|---|---|
| 1% | $0–$10,099 | $0–$20,198 | $0–$14,329 |
| 2% | $10,099–$23,942 | $20,198–$47,884 | $14,329–$33,871 |
| 4% | $23,942–$37,788 | $47,884–$75,576 | $33,871–$48,435 |
| 6% | $37,788–$52,455 | $75,576–$104,910 | $48,435–$61,882 |
| 8% | $52,455–$66,295 | $104,910–$132,590 | $61,882–$74,541 |
| 9.3% | $66,295–$340,031 | $132,590–$680,063 | $74,541–$382,406 |
| 10.3% | $340,031–$408,038 | $680,063–$816,076 | $382,406–$476,047 |
| 11.3% | $408,038–$680,063 | $816,076–$1,360,127 | $476,047–$793,700 |
| 12.3% | $680,063–$816,076 | $1,360,127–$1,632,152 | $793,700–$952,094 |
| 13.3% | Over $816,076 | Over $1,632,152 | Over $952,094 |
These brackets explore to ordinary income. If you have long-term capital gains over $250,000, you also pay an additional 1% tax on those gains. The brackets shift each year, so check the FTB website for the current year's thresholds before you file.
Deductions and credits that lower your California tax
California allows you to reduce your taxable income through deductions and to reduce your tax bill directly through credits. The standard deduction for 2024 is $5,202 for single filers and $10,404 for married couples filing jointly. You can deduct this amount from your income before calculating tax, which lowers the amount that gets taxed.
If you itemize deductions instead of taking the standard deduction, you can deduct state and local taxes (up to $10,000 combined), mortgage interest, charitable donations, and certain other expenses. Most people benefit more from the standard deduction, but if you have large medical expenses, significant charitable giving, or a high mortgage, itemizing may save you more.
California also offers tax credits for education (the California Education Tax Credit), dependent care, earned income (if you may have access to for the federal Earned Income Tax Credit), and other situations. Credits are more valuable than deductions because they reduce your tax bill dollar-for-dollar rather than reducing the income that gets taxed. The FTB website lists all available credits and the income limits for each.
How California withholds tax from your paycheck
If you are an employee, your employer withholds California income tax from each paycheck based on information you provide on Form W-4. The amount withheld depends on your filing status, the number of dependents you claim, and any additional withholding you request. If too much tax is withheld, you receive a refund when you file your return; if too little is withheld, you owe money.
You can adjust your withholding at any time by submitting a new Form W-4 to your employer. If you expect a large refund, you might increase your withholding to get more money in each paycheck. If you expect to owe money, you might decrease your withholding. The FTB has a withholding calculator on its website to help you figure out the right amount.
Self-employed people and those with income not subject to withholding (such as rental income or investment income) may need to make quarterly estimated tax payments to California. These payments are due on April 15, June 15, September 15, and January 15 of the following year.
Filing your California income tax return
California tax returns are due by April 15 each year, the same date as federal returns. You can file electronically through the FTB's website, through tax software, or by mail using Form 540 (the main California income tax return form). E-filing is faster and reduces errors, and the FTB offers free e-filing through its CalFile system if your income is below a certain threshold.
You will need your Social Security number, information about your income (W-2s from employers, 1099s from other sources), records of deductions if you itemize, and information about any tax payments you made during the year. If you file jointly with a spouse, you both need to sign the return or provide electronic signatures.
If you cannot file by April 15, you can request an extension, which gives you until October 15 to file. An extension delays the filing important date but does not delay the payment important date — if you owe tax, it is still due by April 15, or you will owe penalties and interest.
Penalties and interest for late or incorrect payments
If you do not file your return by the important date, the FTB charges a failure-to-file penalty of 5% of the unpaid tax for each month the return is late, up to 25%. If you file on time but do not pay the tax you owe, you face a failure-to-pay penalty of 0.5% per month, also up to 25%. Interest accrues on unpaid tax at a rate set quarterly by the FTB, currently around 8% annually.
If you make an error on your return that results in underpayment of tax, you may owe an accuracy-related penalty of 20% of the underpayment. The FTB typically does not charge this penalty if the error was reasonable or if you made a good-faith effort to comply.
If you cannot pay what you owe, you can set up a payment plan with the FTB or request an installment agreement. The FTB also has an Offer in Compromise program that may allow you to settle your debt for less than the full amount owed, though this is available only in limited circumstances.
Frequently Asked Questions
Do I have to pay California income tax if I live out of state but work in California?
Yes. California taxes income earned within the state regardless of where you live. You file a California return for wages earned in California and a return in your home state for income earned there. You typically receive a credit on your home state return to avoid paying tax twice on the same income.
What is the difference between the standard deduction and itemized deductions?
The standard deduction is a fixed amount you can deduct from your income without documenting expenses — $5,202 for single filers in 2024. Itemized deductions let you deduct specific expenses like mortgage interest and charitable donations, but only if the total exceeds the standard deduction. Most people benefit from the standard deduction, but those with high expenses may save more by itemizing.
When do I have to make quarterly estimated tax payments to California?
Quarterly estimated payments are due April 15, June 15, September 15, and January 15 of the following year if you expect to owe $500 or more in tax and do not have enough withheld from other income. Self-employed people, retirees, and those with investment income often need to make these payments.
What happens if I file my California return late?
You face a failure-to-file penalty of 5% of unpaid tax for each month late, up to 25%, plus interest. If you cannot file by April 15, request an extension by that date to avoid the penalty, though you still owe any tax due by April 15 or you will owe interest and penalties on the unpaid amount.
Can I deduct federal income tax from my California taxable income?
No. California does not allow you to deduct federal income tax. You can deduct state and local taxes (including California income tax, property tax, and sales tax) up to $10,000 combined, but only if you itemize deductions rather than take the standard deduction.