California's tax brackets and rates for 2024

California has 10 tax brackets that range from 1% to 13.3%, and the rate you pay depends on your filing status and total income. The brackets are adjusted each year for inflation, so the income thresholds that trigger each rate change annually. For the 2024 tax year, a single filer earning $10,000 pays 1%, while someone earning $680,000 pays 13.3% on income above that threshold.

The state's top rate of 13.3% includes a 1% Mental Health Tax that applies to income over $1 million. This additional tax was added in 2013 and affects high earners differently depending on filing status. If you earn over $1 million as a single filer, you owe this extra 1% on the amount above that threshold.

California does not have a flat tax or a two-bracket system like some states. Instead, you calculate tax on each portion of your income at the rate that applies to that bracket. This means your effective tax rate — the percentage of your total income that goes to state tax — is lower than your marginal rate (the rate on your last dollar earned).

Key Takeaways

  • California's tax brackets range from 1% to 13.3%, with rates increasing as income rises, and brackets adjust for inflation each year.
  • The 13.3% top rate includes a 1% Mental Health Tax that applies only to income over $1 million, depending on your filing status.
  • Your effective tax rate is lower than your marginal rate because only the income in each bracket is taxed at that bracket's rate.
  • Tax brackets differ by filing status: single, married filing jointly, married filing separately, and head of household each have different income thresholds.
  • You can reduce your California tax through deductions, retirement account contributions, and certain credits, though the state does not allow all federal deductions.

How filing status affects your tax brackets

Your filing status determines which tax bracket schedule you use. Married couples filing jointly have wider brackets than single filers, meaning they can earn more income before moving to the next tax rate. For example, in 2024, a single filer enters the 9.3% bracket at roughly $63,000, while a married couple filing jointly enters that same bracket at roughly $126,000.

Married filing separately uses the same bracket widths as single filers, which often results in a higher combined tax bill than filing jointly. Head of household filers — typically unmarried parents supporting dependents — have bracket widths between single and married filing jointly. If you are unsure which status applies to you, the IRS rules for federal filing also explore to California.

Deductions and credits that lower your California tax

California allows a standard deduction that varies by age and filing status. For 2024, the standard deduction is $4,803 for single filers under 65, $6,093 for single filers 65 and older, and $9,606 for married couples filing jointly under 65. You subtract this amount from your income before calculating tax, which reduces your taxable income and your tax bill.

If you itemize deductions instead of taking the standard deduction, California allows many of the same deductions as the federal return, but not all. California does not allow deductions for state and local taxes (SALT) paid, even though the federal return may allow them. You also cannot deduct federal income tax paid. However, you can deduct mortgage interest, charitable contributions, and medical expenses that exceed a threshold, following California's rules.

California offers tax credits for specific situations: the Earned Income Tax Credit (EITC) for lower-income workers, the Child and Dependent Care Credit, and the Renter's Credit for tenants with low income. These credits directly reduce the tax you owe, dollar for dollar, rather than reducing your income. The EITC is often the largest credit available and can result in a refund even if you owe no tax.

How retirement contributions affect your California tax

Contributions to a traditional 401(k) or 403(b) reduce your California taxable income in the year you make them. If you contribute $7,000 to a traditional 401(k), your California taxable income drops by $7,000, lowering your state tax bill. Roth contributions do not reduce your current-year tax but grow tax-free and withdrawals in retirement are not taxed by California.

A traditional IRA contribution may also reduce your California taxable income, but only if you do not have access to an employer retirement plan or your income is below certain thresholds. If you are covered by a 401(k) at work, your IRA deduction phases out as income rises. California follows federal rules on IRA deductibility, so check your federal return to see whether your IRA contribution was deductible there.

Self-employed individuals can deduct half of their self-employment tax and can contribute to a SEP-IRA or Solo 401(k), both of which reduce California taxable income. The deduction for self-employment tax is taken on your federal return and flows through to California as well.

Income sources that California taxes differently

California taxes wages, salaries, and self-employment income at the regular bracket rates. However, long-term capital gains — profits from selling investments held over one year — are taxed at the same rates as ordinary income in California, unlike the federal system where they receive preferential rates. This means a $100,000 long-term capital gain can push you into a higher bracket and be taxed at up to 13.3%.

may have access to dividends receive the same treatment as long-term capital gains in California and are taxed at ordinary rates. Interest income from bonds, savings accounts, and CDs is taxed as ordinary income. If you have significant investment income, consider the timing of sales and the impact on your bracket before year-end.

Certain income is not taxed by California: federal tax refunds, life insurance proceeds, gifts, and inheritances. Social Security benefits are not taxed by California, even though they may be taxed federally. If you receive income from out of state, California taxes it if you are a resident; if you are a nonresident, California taxes only income earned within the state.

When to consider tax planning before year-end

If you expect a large bonus, stock sale, or other income event before December 31, you may want to plan ahead. Bunching deductible expenses into the year you have high income can increase your deduction benefit. For example, if you are close to itemizing, accelerating charitable donations or medical expenses into the current year may allow you to itemize instead of taking the standard deduction.

Harvesting investment losses — selling losing positions to offset gains — can reduce your taxable income and your California tax. If you sell a stock at a loss, you can use that loss to offset capital gains from other sales. Unused losses carry forward to future years, so even if you have no gains this year, a loss can reduce future tax bills.

If you are self-employed or have variable income, making estimated tax payments four times a year helps you avoid underpayment penalties. California requires estimated payments if you expect to owe $500 or more in tax. The due dates are April 15, June 15, September 15, and January 15 of the following year.

How to file your California return

You file California income tax using Form 540 (the long form) or Form 540-2EZ (the short form for straightforward returns). You can file on paper by mail or electronically through the California Franchise Tax Board (FTB) website or through tax software. Electronic filing is faster and the FTB processes e-filed returns more quickly than paper returns.

If you use tax software, most programs will calculate your California tax automatically once you enter your federal information. The software walks you through deductions, credits, and income sources specific to California. If you file by hand, you will need to look up the current year's tax tables or use the FTB's rate schedules to calculate your tax.

The important date to file is April 15 unless that date falls on a weekend or holiday. If you cannot file by then, you can request an extension, but the extension only delays filing — it does not delay payment. If you owe tax, you should pay by April 15 to avoid interest and penalties, even if you file an extension.

Frequently Asked Questions

Does California tax Social Security benefits?

No. California does not tax Social Security benefits, even if they are taxable on your federal return. If Social Security is your only income, you will owe no California state tax. However, other income you receive — wages, pensions, investment income — is still taxable.

What is the difference between my marginal rate and my effective rate?

Your marginal rate is the tax rate on your last dollar of income. Your effective rate is your total tax divided by your total income. Because California uses brackets, most of your income is taxed at lower rates. For example, a single filer earning $100,000 may have a marginal rate of 9.3% but an effective rate of around 5.5%.

Can I deduct state income tax paid to another state?

No. California does not allow a deduction for income tax paid to other states. If you worked in multiple states or moved during the year, you may owe tax to both states, but you cannot reduce your California tax by the amount you paid elsewhere. However, some states offer credits for tax paid to other states.

Do I have to file a California return if I live out of state?

Only if you earned income in California. If you are a nonresident, you file California Form 540-NR and report only income from California sources. If you have no California income, you do not file. If you moved out of state mid-year, you may file as a part-year resident and report only income earned while you lived in California.

What happens if I underpay my estimated taxes?

The FTB charges interest and penalties on underpayment. The penalty is based on how much you underpaid and how late the payment was. You can avoid the penalty if you paid at least 90% of your current year tax or 100% of your prior year tax through withholding and estimated payments, though the threshold is 110% if your prior year income exceeded $150,000.