California's tax rates depend on your income bracket and filing status

California has a progressive income tax system, meaning the rate you pay increases as your income rises. The state does not have a flat tax — instead, different portions of your income are taxed at different rates. For the 2024 tax year, rates range from 1% on the lowest bracket to 13.3% on the highest, but you do not pay 13.3% on all your income, only on the portion that falls in that top bracket.

Your filing status — single, married filing jointly, head of household, or married filing separately — determines which income bracket you fall into. A married couple filing jointly reaches higher income thresholds before moving to the next tax bracket than a single filer would, which means the same dollar amount of income may be taxed at different rates depending on how you file.

California also adds a 1% Mental Health Tax on income over $1 million per year. This is separate from the regular income tax brackets and applies only to high earners. If your income exceeds $1 million, you will owe this additional tax on the amount above that threshold.

Key Takeaways

  • California income tax rates for 2024 range from 1% to 13.3%, with rates increasing as income rises in each bracket.
  • Your filing status determines your tax bracket thresholds, so the same income amount may be taxed differently for single filers versus married couples.
  • You only pay the higher rate on income that falls within that bracket, not on your entire income.
  • A 1% Mental Health Tax applies to income over $1 million per year, in addition to regular state income tax.
  • California taxes most types of income, including wages, self-employment income, interest, and dividends, though some retirement income may be partially exempt.

The 2024 tax bracket structure for each filing status

The brackets shift slightly each year because California adjusts them for inflation. For 2024, a single filer pays 1% on the first portion of income, then the rate steps up at $10,099, again at $23,942, and continues climbing through higher brackets until reaching 13.3% on income over $680,063. The exact dollar amounts where each bracket begins and ends are different for married couples filing jointly, heads of household, and married couples filing separately.

To find your tax, you do not calculate 13.3% of your total income. Instead, you calculate the tax on each bracket separately and add them together. For example, if you are single and earned $50,000 in 2024, you would pay 1% on the first $10,099, then 2% on the income between $10,099 and $23,942, then 4% on the income between $23,942 and $50,000. The result is a blended rate that is lower than the 4% bracket rate alone.

California publishes updated bracket amounts each year on the Franchise Tax Board website. If you file taxes in 2025 for the 2024 tax year, use the 2024 brackets. The brackets you use depend on the tax year you are reporting, not the year you file.

What income is subject to California state tax

California taxes most forms of income: wages from employment, self-employment income, interest, dividends, rental income, and capital gains. If you earned money in California or you are a California resident who earned money anywhere, you generally owe California state income tax on that income.

Some types of income are partially or fully exempt. Social Security benefits are not taxed by California. Certain retirement distributions, including some distributions from traditional IRAs and 401(k)s, may be partially exempt if you meet specific age and income requirements. Military retirement pay is also exempt. However, most other retirement income — pensions, annuities, and distributions from retirement accounts before age 59½ — is taxable.

If you are not sure whether a specific type of income you received is taxable, the Franchise Tax Board publishes guidance on their website, or you can contact them directly. Many people overlook income from side work, rental properties, or investment accounts, which can result in underpayment.

How to calculate your California tax liability

Start with your federal adjusted gross income (AGI) from your federal tax return. California uses federal AGI as the starting point and then makes specific adjustments. Some adjustments add income back in; others subtract income. For most wage earners, California AGI is the same as federal AGI, but self-employed people, investors, and people with certain deductions may see differences.

Once you have your California AGI, subtract the standard deduction for your filing status. For 2024, the California standard deduction ranges from $5,202 for single filers to $10,404 for married couples filing jointly. If you itemize deductions on your federal return, you may also itemize on your California return, though California does not allow all the same deductions that the federal government does.

After subtracting the standard deduction (or itemized deductions), you have your taxable income. Apply the tax brackets for your filing status to this amount, calculate the tax owed, and then subtract any tax credits you are may have access to to. The result is your California state income tax liability.

Tax credits that reduce what you owe

California offers several tax credits that directly reduce the amount of tax you owe. The Earned Income Tax Credit (EITC) is available to low- and moderate-income workers and is based on your earned income and filing status. The Child and Dependent Care Credit helps offset the cost of childcare. The Dependent Exemption Credit provides a credit for each dependent you claim.

Some credits are refundable, meaning if the credit is larger than the tax you owe, you receive the difference as a refund. Others are non-refundable, meaning they can reduce your tax to zero but cannot result in a refund. The California EITC, for example, is partially refundable, so even workers who owe no tax may receive a refund if they meet the requirements.

To claim credits, you must report them on your California tax return. Many people do not claim credits they are may have access to to because they do not know about them or do not realize they meet the requirements. The Franchise Tax Board website lists all available credits and the income thresholds for each.

Withholding and estimated tax payments

If you are an employee, your employer withholds California state income tax from your paycheck based on the W-4 form you complete. The amount withheld depends on your income, filing status, and the number of dependents you claim. If too much is withheld, you receive a refund when you file your return. If too little is withheld, you owe tax when you file.

If you are self-employed or have income that is not subject to withholding — such as rental income or investment income — you may need to make quarterly estimated tax payments to California. These payments are due on April 15, June 15, September 15, and January 15. If you do not make estimated payments and you owe more than $500 when you file, you may owe a penalty in addition to the tax itself.

You can adjust your withholding at any time by submitting a new W-4 to your employer. If you expect to owe tax or receive a large refund, changing your withholding mid-year can help you avoid both penalties and overpayment.

Frequently Asked Questions

Do I have to pay California income tax if I live out of state but work in California?

Yes, if you earned income in California, you owe California state income tax on that income regardless of where you live. California taxes income earned within the state by nonresidents. However, you may be able to claim a credit on your home state's return for taxes paid to California to avoid double taxation.

What is the difference between the standard deduction and a tax bracket?

The standard deduction is a flat amount you subtract from your income before calculating tax. Tax brackets are the rates applied to your income after the deduction. A higher standard deduction means less of your income is subject to tax. The brackets determine what percentage of that remaining income you pay.

If I owe California income tax, when is it due?

California income tax returns are due on the same date as federal returns, typically April 15. If you file an extension, your return is due October 15, but any tax owed is still due by April 15 or you will owe interest and penalties. Paying by the April deadline, even if you file late, reduces the penalties you face.

Can I deduct federal income tax from my California state tax?

No, California does not allow a deduction for federal income tax paid. If you itemize deductions on your California return, you can deduct state and local taxes (SALT) up to $10,000, but this is a federal limit that also applies to your California return. Federal tax itself is never deductible.

How do I know if I need to file a California return?

You must file if your income exceeds the standard deduction for your filing status, or if you had California income tax withheld from your paycheck. Even if your income is below the standard deduction, filing may result in a refund if taxes were withheld. The Franchise Tax Board website has a filing requirements tool to help you determine whether you must file.