California's tax brackets and rates for 2024
California has nine tax brackets that range from 1% to 13.3%, depending on your income level. The rate you pay depends on your filing status (single, married filing jointly, head of household, or married filing separately) and your total taxable income for the year. Unlike a flat tax, you do not pay the highest rate on all your income — only on the portion that falls within each bracket.
For single filers in 2024, the brackets start at 1% on income up to $10,099, then move through 2%, 4%, 6%, 8%, 9.3%, 10.23%, 11.053%, and finally 12.3% on income over $680,063. Married couples filing jointly have higher income thresholds before moving into each bracket. The top rate of 13.3% applies only to very high earners — specifically, single filers with income over $1,000,000 and married filers with income over $1,200,000. This top rate was added in 2012 and is subject to change based on state legislation.
Key Takeaways
- California's tax brackets range from 1% to 13.3%, and the rate you pay depends on how much income you earn and your filing status.
- You pay different rates on different portions of your income — the lowest rates apply to your first dollars earned, and higher rates only apply to income above certain thresholds.
- Your taxable income is not the same as your gross income; deductions and credits reduce the amount subject to tax.
- California also taxes certain types of income that federal tax may not, including some retirement distributions and out-of-state income.
How taxable income is calculated
Your taxable income is what remains after you subtract deductions from your gross income. Gross income includes wages, self-employment income, interest, dividends, rental income, and other sources. California allows you to take either the standard deduction or itemize deductions, whichever results in a lower tax bill.
For 2024, the California standard deduction is $5,202 for single filers and $10,404 for married couples filing jointly. If you itemize instead, you list out specific expenses like mortgage interest, property taxes, charitable donations, and medical expenses. After you subtract your deduction from gross income, you then apply the tax brackets to what remains. This is why two people earning the same gross income may owe different amounts of tax — their deductions differ.
What income California taxes that federal tax may not
California taxes some types of income that the federal government does not, or taxes them differently. Retirement distributions from out-of-state plans, certain types of gambling winnings, and income earned while you were a California resident but received after you moved are all subject to California tax. If you moved out of state, you may still owe California tax on income you earned while living here, even if you now live elsewhere.
Social Security benefits are generally not taxed by California, which is one advantage over federal taxation. However, if you have other income sources, your total income level can affect how much of your Social Security is taxed at the federal level. California also does not tax military pensions or certain federal employee pensions, though it does tax most other retirement income.
Tax credits that reduce what you owe
Tax credits are different from deductions because 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), child and dependent care credits, and credits for taxes paid to other states. The EITC is the largest credit for lower-income workers and can result in a refund even if you owe no tax.
To claim a credit, you must meet specific income and may be able to access requirements. The California EITC, for example, has income limits that vary by family size and filing status. You claim credits on your tax return when you file, and they are applied after your tax is calculated. If a credit is larger than the tax you owe, you receive the difference as a refund.
Self-employment tax and additional levies
If you are self-employed, you pay both income tax and self-employment tax. Self-employment tax covers Social Security and Medicare and is calculated on your net self-employment income. California does not have a separate self-employment tax, but you must pay federal self-employment tax and can deduct half of it from your California taxable income.
California also imposes a Net Investment Income Tax of 3.8% on certain high-income earners. This applies to single filers with modified adjusted gross income over $250,000 and married filers over $500,000. The tax applies to net investment income such as capital gains, dividends, and interest. This is in addition to regular income tax and is calculated separately.
How to report income and file your return
You report your income to California using Form 540 (the California resident income tax return) or Form 540-NR if you are a nonresident. You must file if your gross income exceeds the threshold for your filing status, even if you do not owe tax. The filing deadline is typically April 15, though you can request an extension to October 15.
You will need documentation for all income sources: W-2 forms from employers, 1099 forms for self-employment or investment income, and statements for retirement distributions or other income. If you claim deductions, keep receipts or statements to support them. You can file on paper by mailing your return to the Franchise Tax Board, or you can file electronically through the FTB's website or through tax software.
Frequently Asked Questions
Do I have to pay California income tax if I moved out of state?
You owe California tax only on income you earned while you were a resident. Once you establish residency in another state, you no longer owe California tax on new income. However, if you moved mid-year, you owe tax on income earned up to your move date. You will file as a part-year resident and report only the income earned during the months you lived in California.
What is the difference between a deduction and a credit?
A deduction reduces the amount of income that is taxed, while a credit reduces the tax bill itself. If you are in the 9.3% bracket and take a $1,000 deduction, you save $93 in tax. If you take a $1,000 credit, you save $1,000. Credits are generally more valuable, but you must meet specific requirements to claim them.
Can I deduct federal income tax paid from my California taxes?
No. California does not allow you to deduct federal income tax paid. However, if you paid taxes to another state, you may be able to claim a credit for those taxes on your California return, up to the amount of California tax you owe.
What happens if I do not file a California tax return?
The Franchise Tax Board can assess penalties and interest on unpaid taxes. If you owe money, the longer you wait, the more interest accumulates. If you do not owe but are due a refund, you have a time limit to claim it — typically four years from the original due date.