California taxes your income at rates between 1% and 13.3%, depending on how much you earn
California has its own state income tax separate from federal tax. The state taxes wages, self-employment income, investment gains, and other earnings. Your rate depends on your filing status and total income — the more you earn, the higher your percentage. Unlike some states, California does not have a flat tax rate; instead, it uses a progressive system with multiple tax brackets that change each year.
You owe California state tax if you lived in the state for any part of the tax year, worked there, or earned income from California sources. If you moved to California mid-year or left mid-year, you still file a California return for the months you were a resident. The state taxes residents on all income, wherever it came from, and nonresidents only on income earned within California.
Key Takeaways
- California's tax rates range from 1% to 13.3% and are based on your income bracket and filing status, not a single flat rate.
- You must file a California return if you lived in the state at any point during the tax year or earned income from California sources.
- The state taxes W-2 wages, self-employment income, rental income, capital gains, and retirement distributions the same way the federal government does.
- California allows deductions for federal taxes paid, mortgage interest, charitable donations, and other expenses, which can lower your taxable income.
- If you owe more than $150 in tax, you may need to make quarterly estimated payments throughout the year rather than paying once at tax time.
The 2024 California tax brackets and rates
California's tax brackets shift slightly each year to account for inflation. For the 2024 tax year (filed in 2025), the brackets are:
| Filing Status | Income Range | Tax Rate |
|---|---|---|
| Single | $0 to $10,099 | 1% |
| Single | $10,100 to $23,942 | 2% |
| Single | $23,943 to $37,788 | 4% |
| Single | $37,789 to $52,455 | 6% |
| Single | $52,456 to $66,295 | 8% |
| Single | $66,296 to $340,328 | 9.3% |
| Single | $340,329 to $408,393 | 10.3% |
| Single | $408,394 to $680,656 | 11.3% |
| Single | Over $680,656 | 12.3% or 13.3%* |
The brackets for married filing jointly, head of household, and other statuses are wider but use the same rates. The 13.3% rate applies only to income over $680,656 for single filers (or $1,361,312 for married filing jointly) and is the highest state income tax rate in the nation. California also imposes a 1% Mental Health Tax on income over $1 million, which can push the effective rate to 13.3% for high earners.
What income California taxes
California taxes most forms of income the same way the federal government does. This includes W-2 wages from an employer, self-employment income from a business or freelance work, rental income from property, capital gains from selling stocks or real estate, and distributions from retirement accounts like IRAs and 401(k)s. Interest and dividend income are also taxable.
Some income is exempt from California tax. This includes certain retirement benefits for military members, some disability payments, and workers' compensation. Social Security benefits are generally not taxed by California, though the federal government may tax them. If you are unsure whether a specific payment counts as income, the California Franchise Tax Board website lists exemptions in detail.
Deductions that lower your California taxable income
California allows you to deduct certain expenses before calculating your tax. The most common deduction is the standard deduction, which varies by filing status and age. For 2024, the standard deduction for a single filer under 65 is $5,202; for married filing jointly, it is $10,404. If you are 65 or older, you get an additional deduction.
You can also deduct federal income taxes you paid during the year — a major difference from many other states. California allows you to deduct the full amount of federal tax withheld from your paycheck or paid through estimated tax payments. Other deductions include mortgage interest, property taxes (up to $10,000 combined with state and local taxes), charitable donations, and student loan interest. If your total deductions exceed the standard deduction, you can itemize instead.
Self-employment tax and quarterly payments
If you are self-employed or have significant income not subject to withholding, California requires you to make quarterly estimated tax payments. These are due on April 15, June 15, September 15, and January 15 of the following year. You estimate your annual income and tax, then pay one-quarter of that amount each quarter.
You must make quarterly payments if you expect to owe $150 or more in tax for the year. If you do not pay quarterly and owe a large amount at tax time, you may face penalties and interest. You can calculate your estimated payment using Form 540-ES, available on the California Franchise Tax Board website. If your income changes during the year, you can adjust your remaining quarterly payments.
Filing important date and where to file
California income tax returns are due on the same day as federal returns, which is typically April 15. If April 15 falls on a weekend or holiday, the important date moves to the next business day. You can request an automatic extension to October 15, though this extends only the filing important date, not the payment important date — taxes owed are still due by April 15 or you will owe interest and penalties.
You file your California return using Form 540 (the long form) or Form 540-2EZ (the short form, for straightforward returns). Both are available on the California Franchise Tax Board website. You can file by mail, electronically through the state's e-file system, or through tax software that supports California returns. If you use a tax professional, they can file on your behalf.
Credits that reduce your tax bill directly
Tax credits are different from deductions — they reduce your tax bill dollar-for-dollar rather than reducing your taxable income. California offers several credits, including the Earned Income Tax Credit (EITC) for lower-income workers, the Child and Dependent Care Credit, and the California Child Tax Credit. Some credits are refundable, meaning you get money back even if you owe no tax; others are nonrefundable and can only reduce your tax to zero.
The California EITC is worth up to $3,733 for a single filer with one may have access to child, depending on your income. The state also offers credits for dependent care expenses, adoption costs, and energy-efficient home improvements. You claim credits on your return when you file. If you think you may be may have access to to a credit, check the California Franchise Tax Board website or use tax software that walks you through available credits.
Frequently Asked Questions
Do I have to file a California return if I only lived there part of the year?
Yes. If you lived in California for any part of the tax year, you must file a California return. You report only the income earned during the months you were a resident. If you moved out of state mid-year, you file as a part-year resident and report income only for the months before you left.
What happens if I do not pay my California taxes on time?
The state charges interest on unpaid taxes starting the day after the due date. If you do not pay within a certain period, penalties are added on top of the interest. If you cannot pay by April 15, you can still file your return on time to reduce penalties, then work out a payment plan with the California Franchise Tax Board.
Can I deduct state and local taxes on my California return?
Yes, but only up to $10,000 combined with property taxes and sales taxes. This is a California deduction separate from the federal deduction. You can deduct the full amount of federal income tax you paid, which is not subject to the $10,000 cap.
Do I owe California tax on income earned outside the state?
If you are a California resident, yes — the state taxes all your income, regardless of where you earned it. If you are a nonresident, you owe California tax only on income earned from California sources, such as wages from a California employer or rental income from California property.
What is the difference between the standard deduction and itemizing?
The standard deduction is a fixed amount based on your filing status. Itemizing means adding up your actual deductions (mortgage interest, property taxes, charitable donations, and others) and using that total instead. You use whichever is larger. Most people use the standard deduction because it is simpler and often larger than their itemized deductions.