California's Tax Brackets and Rates

California taxes income on a sliding scale, meaning the rate you pay depends on how much you earn. The state uses 13 tax brackets, ranging from 1% on the lowest incomes to 13.3% on the highest. This is higher than most other states — only a handful charge more than 10% at the top bracket.

The brackets change each year because California adjusts them for inflation. For 2024, a single filer pays 1% on income up to $10,099, then the rate steps up as income increases. By the time you reach $680,000 and above, you pay 13.3% on that portion of your income. If you file as married filing jointly, each bracket is roughly double the single filer amount.

You only pay the higher rate on income that falls into that bracket — not on your entire income. For example, if you earn $50,000 as a single filer, you do not pay 9.3% on all of it. You pay 1% on the first $10,099, then 2% on the next portion, and so on, stepping up through the brackets until you reach $50,000.

Key Takeaways

  • California's top income tax rate is 13.3%, applied only to income above $680,000 for single filers in 2024, and the rate increases each year with inflation.
  • You pay different rates on different portions of your income based on which bracket each portion falls into, not one flat rate on everything you earn.
  • The brackets for married filing jointly are roughly double those for single filers, so a married couple pays the same rate on roughly twice the income.
  • California also taxes certain types of income differently, including capital gains, which face an additional 1% tax on gains over $250,000 for high earners.

How the Brackets Work in Practice

Understanding brackets is easier with a real example. Say you are a single filer earning $75,000 in 2024. You do not pay one rate on all $75,000. Instead, you pay 1% on the first $10,099, then 2% on income from $10,100 to $23,942, then 4% on income from $23,943 to $37,788, and so on. Your total tax is the sum of what you owe on each bracket, not 4% (or whatever bracket $75,000 falls into) on the whole amount.

This system means your effective tax rate — the percentage of your total income that goes to taxes — is always lower than your marginal tax rate, which is the rate on your last dollar earned. If you earn $75,000, your marginal rate might be 6%, but your effective rate is closer to 3.5%. This matters when you are deciding whether to take on extra income or a side job, because you only pay the marginal rate on that new money, not the effective rate on everything.

Special Tax on Capital Gains

California added a separate tax on long-term capital gains in 2023. If you sell an investment, real estate, or business and make a profit, that gain is taxed at your ordinary income tax rate — but there is an extra 1% tax on gains over $250,000 in a single year for single filers (over $500,000 for married filing jointly). This 1% is on top of your regular income tax, not instead of it.

The capital gains tax applies only to gains, not to the full sale price. If you buy a house for $400,000 and sell it for $600,000, your gain is $200,000. If you are a single filer, that $200,000 does not trigger the extra 1% because it is under $250,000. But if your gain is $300,000, the extra 1% applies only to the $50,000 above the threshold.

Who Pays California Income Tax

You owe California income tax if you are a resident of the state or if you earned income in California while living elsewhere. Residency is not just about where you have a house — it is about where you spend most of your time and where your permanent home is. If you moved to California mid-year, you may owe tax on income earned after you arrived, even if you were not a resident for the full year.

If you worked in California but live in another state, you still owe California tax on that income. However, your home state may give you a credit for taxes paid to California, so you do not pay twice. The rules vary by state, so check with your home state's tax authority if you worked across state lines.

Deductions and Credits That Lower Your Tax

California allows you to subtract certain expenses from your income before calculating tax. The standard deduction is the simplest route — for 2024, it is $5,202 for single filers and $10,404 for married filing jointly. You subtract this amount from your income, and you only pay tax on what remains. If you earn $40,000 and take the standard deduction, you pay tax on $34,798.

You can also itemize deductions if they add up to more than the standard deduction. These include mortgage interest, property taxes (up to $10,000 combined with state income tax under federal rules), charitable donations, and medical expenses above a certain threshold. California follows federal rules on most deductions, though some deductions allowed by California are not allowed by the federal government, and vice versa.

Tax credits are different from deductions — they reduce your tax dollar-for-dollar rather than reducing your income. California offers credits for things like child care expenses, earned income (if you have low to moderate income), and renters' property taxes. These credits can lower your tax bill significantly, and some are refundable, meaning you get money back even if you owe no tax.

When Your Tax Rate Changes

Your tax bracket can shift if your income changes, and it shifts automatically each year because California adjusts brackets for inflation. If you earned $50,000 last year and earn $60,000 this year, you may move into a higher bracket on the extra $10,000. This is not a penalty — it is how progressive tax systems work. You only pay the higher rate on income above the old bracket threshold.

Life changes also affect your rate. If you marry, your brackets roughly double, which usually lowers your overall tax because income is spread across wider brackets. If you have a child, you may become may be able to access for credits that reduce your tax. If you retire and your income drops, you move into lower brackets. Understanding how these changes affect your tax helps you plan ahead.

Frequently Asked Questions

Does California tax Social Security or retirement income?

California does not tax Social Security benefits. Retirement account withdrawals like 401(k) and IRA distributions are taxed as ordinary income, but Social Security is exempt. If you have other income, it counts toward your total, which may push you into a higher bracket.

What is the difference between California and federal income tax rates?

California's top rate is 13.3%, while the federal top rate is 37%. You pay both — they are separate taxes. Your federal tax is calculated on your federal taxable income, and your California tax is calculated on your California taxable income. They use different brackets and rules, so your effective rate for each is different.

Do I have to file a California tax return if I live out of state?

If you earned income in California during the year, you must file a California return on that income, even if you live elsewhere. If you earned no California income, you do not file. Your home state may also require a return, so check both states' rules.

Can I deduct federal taxes from my California income?

No. California does not allow you to deduct federal income tax from your California taxable income. Federal tax is a separate liability. However, you can deduct state income tax on your federal return, up to $10,000 combined with property taxes and sales tax.

What happens if I move out of California mid-year?

You owe California tax only on income earned while you were a resident. If you moved on July 1, you owe tax on income from January through June. Your new state may tax income earned after you arrived. File a part-year resident return in California and a resident return in your new state, and each will tax only the income earned during your time there.