California's income tax rates range from 1% to 13.3%, depending on your income level
California uses a progressive tax system, meaning the rate you pay 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%, and the highest reaches 13.3%.
The state also adds a Mental Health Tax of 1% on income over $1 million per year. This is separate from the regular income tax brackets and applies only to high earners. For most workers, this does not apply.
California's rates are among the highest in the nation. The exact amount you owe depends on your filing status (single, married filing jointly, head of household, or married filing separately) and your total taxable income for the year.
Key Takeaways
- California taxes income at rates from 1% to 13.3%, with higher earners paying higher percentages on income in their bracket.
- The tax brackets change each year based on inflation, so the income thresholds that trigger each rate shift annually.
- A separate 1% Mental Health Tax applies to income over $1 million, on top of regular income tax.
- Your filing status (single, married, head of household) determines which bracket your income falls into.
- Self-employed workers pay both employee and employer portions of Social Security and Medicare taxes in addition to state income tax.
How the tax brackets work for 2024
For the 2024 tax year, California's brackets for single filers start at 1% on income up to $10,099, then jump to 2% on income from $10,100 to $23,942. The brackets continue to climb: 4% up to $37,788, then 6%, 8%, 9.3%, 10.3%, 11.3%, 12.3%, and finally 13.3% on income over $680,063.
If you are married filing jointly, your brackets are roughly double the single filer amounts. For example, the 1% bracket extends to $20,198 instead of $10,099. Head of household filers have their own set of brackets, which fall between single and married filing jointly.
These numbers change every year. The Franchise Tax Board adjusts the brackets for inflation, so the income thresholds shift upward annually. You will see the updated brackets on the FTB website and on tax forms each January.
What income counts toward California taxes
California taxes most types of income: wages from employment, self-employment income, interest, dividends, rental income, and capital gains. However, some income is excluded. Social Security benefits are not taxed by California. Certain retirement distributions and disability payments may also be excluded, depending on your age and the source.
If you work in California but live in another state, you still owe California tax on income earned in the state. If you live in California but work remotely for an out-of-state employer, you owe California tax on that income too. The key is where the work was performed or where the income was earned, not where you live or where your employer is based.
The Mental Health Tax on high earners
In addition to regular income tax, California imposes a 1% Mental Health Tax on income exceeding $1 million per year. This tax was introduced in 2021 and applies to both residents and nonresidents who earn income in California.
The Mental Health Tax is calculated separately from regular income tax brackets. If you earn $1.5 million, you pay the 13.3% rate on the portion of income in that bracket, plus an additional 1% Mental Health Tax on the $500,000 that exceeds $1 million. This tax funds mental health and substance use disorder services.
How to calculate what you owe
To estimate your California income tax, start with your total income for the year. Subtract any deductions you are may have access to to—the standard deduction or itemized deductions, whichever is larger. Then subtract any other adjustments, such as contributions to a traditional IRA or student loan interest paid.
The result is your taxable income. Find your filing status and locate your taxable income amount in the tax bracket table for your year. Multiply the income in each bracket by that bracket's rate, then add the results together. If your income exceeds $1 million, add 1% of the amount over $1 million.
Most workers do not calculate this themselves. Your employer withholds tax from each paycheck based on the W-4 form you filed. Self-employed workers must make quarterly estimated tax payments to the Franchise Tax Board. When you file your return, you either owe additional tax or receive a refund based on what was actually withheld versus what you owed.
Deductions and credits that lower your tax bill
California offers a standard deduction that reduces your taxable income before tax is calculated. For 2024, the standard deduction is $5,202 for single filers and $10,404 for married filing jointly. These amounts increase slightly each year for inflation.
You can also claim certain tax credits, which directly reduce the tax you owe rather than reducing your income. The California Earned Income Tax Credit (CalEITC) is available to low- and moderate-income workers. The Child and Dependent Care Credit, Dependent Exemption Credit, and other credits may also apply depending on your situation.
If you itemize deductions instead of taking the standard deduction, you can deduct mortgage interest, property taxes, charitable donations, and some medical expenses. However, most California taxpayers benefit more from the standard deduction.
When and how to file California income tax
California income tax returns are due on the same date as federal returns: April 15 of the following year, or the next business day if April 15 falls on a weekend. You file using Form 540 (or Form 540-2EZ for simpler situations) and submit it to the Franchise Tax Board.
You can file online through the FTB website, by mail, or through a tax preparation service. If you owe money, you can pay when you file or set up a payment plan with the FTB. If you are owed a refund, the FTB typically processes it within 30 days of receiving your return, though it can take longer during peak filing season.
If you do not file by the deadline, the FTB charges penalties and interest on any tax owed. If you cannot file by April 15, you can request an automatic extension, which gives you until October 15 to file. The extension applies only to filing; taxes are still due by April 15.
Frequently Asked Questions
Do I have to pay California income tax if I just moved to the state?
You owe California tax only on income earned while you were a resident. If you moved to California partway through the year, you file a part-year resident return and pay tax only on income earned after you became a resident. You will need to show proof of your move date, such as a lease or utility bill.
What if I work in California but live in another state?
You owe California tax on income earned in California, even if you live elsewhere. You file a nonresident return with the FTB. You may also owe tax to your home state, depending on its rules. Some states have reciprocal agreements that prevent double taxation, but you should check your home state's requirements.
Are retirement distributions taxed by California?
Most retirement distributions are taxed as regular income. However, distributions from certain retirement accounts—such as military pensions, federal pensions, and some public employee pensions—may be partially or fully excluded. Social Security is not taxed. Check the FTB website or speak with a tax professional about your specific situation.
How much will be withheld from my paycheck?
The amount depends on the W-4 form you filed with your employer and your income level. You can adjust your withholding by filing a new W-4 if you expect a large refund or owe money each year. The FTB provides a withholding calculator on its website to help you estimate the correct amount.
What happens if I do not file a California tax return?
The FTB can assess penalties and interest on any tax owed, and the debt can accumulate over time. The state can also place a lien on your property or intercept your tax refunds. If you have not filed in past years, you can still file late returns; the sooner you do, the less interest accrues.