California taxes your income at rates between 1% and 13.3%, depending on how much you earn
California has a progressive income tax system, meaning the tax rate increases as your income increases. You do not pay one flat rate on all your income. Instead, your income is divided into brackets, and each bracket is taxed at its own rate. The lowest bracket starts at 1% for income under a certain threshold, and the highest bracket reaches 13.3% for the highest earners.
The state also taxes capital gains (money from selling investments), retirement distributions, and other forms of income. If you work in California or live there, you owe state income tax on income earned anywhere in the world. If you live outside California but work there, you typically owe tax only on California-source income.
Key Takeaways
- California's income tax brackets for 2024 range from 1% on the lowest income to 13.3% on income over $680,000 for single filers, with different thresholds for married and other filing statuses.
- Tax brackets change each year based on inflation, so the income levels that trigger each rate shift annually.
- You must file a California tax return if you earned income in the state or lived there during the tax year, even if you owe no tax.
- The Franchise Tax Board (FTB) administers California income tax and handles audits, payment plans, and refunds.
- Federal tax liability does not automatically determine your California tax — the two systems have different rules and deductions.
The 2024 tax brackets and rates for California residents
For the 2024 tax year, California's 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 $408,350 | 10.3% |
| Single | $408,351 to $680,063 | 11.3% |
| Single | Over $680,063 | 13.3% |
Married couples filing jointly have higher income thresholds for each bracket. For example, the 9.3% bracket for married filers starts at $132,656 instead of $66,296. Head of household and other filing statuses have their own bracket structures. The Franchise Tax Board publishes updated brackets each year on its website.
These brackets are adjusted annually for inflation, so the income levels shift each year. This means the same dollar amount may fall into a different bracket from year to year. You must use the brackets for the tax year you are filing, not the current year.
What income counts toward California taxes
California taxes most forms of income: wages from employment, self-employment income, interest, dividends, rental income, and retirement distributions. If you receive income from a business you own, you report it on Schedule C and pay both income tax and self-employment tax. Unemployment benefits, Social Security benefits, and certain disability payments are also taxable in California under specific rules.
Some income is partially or fully exempt. For example, certain military pensions and federal employee pensions receive special treatment. Roth IRA withdrawals are not taxed if you follow the rules. Gifts and inheritances are not taxable income. If you are unsure whether a specific type of income is taxable, the Franchise Tax Board's website has detailed guidance by income type.
Deductions and credits that reduce your California tax bill
California allows a standard deduction based on your filing status and age. For 2024, the standard deduction for a single filer under 65 is $5,202. Married couples filing jointly have a standard deduction of $10,404. If you are 65 or older, you get an additional deduction amount. You can use the standard deduction or itemize deductions if itemizing results in a larger deduction.
California also offers tax credits that directly reduce the amount of tax you owe. The Earned Income Tax Credit (EITC) is available to lower-income workers. The California Child and Dependent Care Credit helps with childcare costs. The Renter's Credit provides relief for renters with low income. Unlike deductions, which reduce your taxable income, credits reduce your actual tax liability dollar-for-dollar.
How to file your California state income tax return
You must file a California return if you had income during the tax year and your income exceeds the filing threshold for your status. Even if you owe no tax, filing may be worth it if you are due a refund or want to claim credits. The filing deadline is typically April 15, though it shifts if that date falls on a weekend or holiday.
You can file online through the Franchise Tax Board's website, through tax software that supports California returns, or by mailing a paper Form 540 (the main California income tax return form). If you use tax software, make sure it includes California forms. Many free options are available through the IRS Free File program if your income is below a certain threshold.
If you cannot file by the deadline, you can request an extension, but an extension to file is not an extension to pay. If you owe tax, you must pay by April 15 or face penalties and interest, even if your return is not yet filed.
Penalties and interest for late payment or filing
If you file late, the Franchise Tax Board charges a failure-to-file penalty of 5% of the unpaid tax for each month the return is late, up to 25%. If you pay late, a failure-to-pay penalty of 0.5% per month applies, also capped at 25%. Interest accrues daily on any unpaid tax at a rate set quarterly by the state.
If you underpay your taxes during the year through withholding or estimated payments, you may owe an underpayment penalty. Self-employed people and those with income not subject to withholding must make quarterly estimated tax payments to avoid this penalty. The due dates are typically April 15, June 15, September 15, and January 15 of the following year.
Frequently Asked Questions
Do I owe California income tax if I moved out of state during the year?
You owe California tax only on income earned while you were a resident or on California-source income after you left. If you moved out on June 30, you report income from January through June 30 on your California return and income from July onward on your new state's return. You must file a part-year resident return with both states and provide documentation of your move date.
What is the difference between California and federal income tax?
California and the federal government both tax income, but they use different tax rates, brackets, deductions, and credits. Your federal tax liability does not determine your California tax. You must calculate both separately. Some deductions allowed by the IRS are not allowed by California, and vice versa. Filing federal taxes does not automatically file your California return.
Can I get a refund if I overpaid California taxes?
Yes. If your withholding or estimated payments exceed your actual tax liability, the Franchise Tax Board will refund the difference. Refunds are typically issued within 30 to 60 days of processing your return, though it can take longer during peak filing season. You can check your refund status on the FTB website using your Social Security number and filing status.
What happens if I do not file a California tax return?
The Franchise Tax Board can file a return on your behalf based on information from employers and other sources, but this return may not include deductions or credits you are due. You could lose refunds or credits you would have received. The state can also assess penalties and interest. If you owe back taxes, the FTB can place a lien on your property or garnish wages.
Are Social Security benefits taxable in California?
California does not tax Social Security benefits, even if the federal government does. This is one area where California rules differ significantly from federal rules. If you receive Social Security, you do not include it in your California taxable income, though you still report it on your federal return if required.