California State Income Tax Guide 2025-26
California has one of the most progressive income tax systems in the United States, with rates ranging from 1% to 14.4%. Understanding how California taxes your income is essential for financial planning, whether you're a long-time resident or considering moving to the Golden State.
How California's Progressive Tax System Works
Unlike flat-tax states such as Illinois or Pennsylvania, California uses a progressive tax structure where your tax rate increases as your income rises. This means different portions of your income are taxed at different rates, similar to the federal tax system.
2025-26 California Tax Brackets
Single Filers:
- 1% on income up to $10,412
- 2% on income $10,413 - $24,684
- 4% on income $24,685 - $38,959
- 6% on income $38,960 - $54,081
- 8% on income $54,082 - $68,350
- 9.3% on income $68,351 - $349,137
- 10.3% on income $349,138 - $418,961
- 11.3% on income $418,962 - $698,271
- 12.3% on income over $698,271
- 13.3% on income over $1,000,000
Married Filing Jointly:
- 1% on income up to $20,824
- 2% on income $20,825 - $49,368
- 4% on income $49,369 - $77,918
- 6% on income $77,919 - $108,162
- 8% on income $108,163 - $136,700
- 9.3% on income $136,701 - $698,274
- 10.3% on income $698,275 - $837,922
- 11.3% on income $837,923 - $1,396,542
- 12.3% on income over $1,396,542
- 13.3% on income over $1,000,000
Note: The 14.4% rate includes the 1% Mental Health Services Tax on income over $1 million.
California Standard Deduction 2025
California offers its own standard deduction, separate from the federal standard deduction:
- Single filers: $5,363
- Married filing jointly: $10,726
- Head of household: $10,726
These deductions reduce your taxable income before calculating your tax liability. Unlike the federal system, California's standard deduction amounts are significantly lower.
Who Must File a California State Tax Return?
You must file a California state tax return if:
- You're a full-year California resident with income exceeding the filing threshold
- You're a part-year resident who earned income while living in California
- You're a non-resident with California-source income (e.g., rental property, business operations)
- You had California taxes withheld from your paycheck and want a refund
💡 Remote Work & California Taxes
If you're a California resident working remotely for an out-of-state company, you still owe California income tax on all your earnings. Conversely, if you're a non-resident working remotely for a California company while living elsewhere, you generally don't owe California tax (though some exceptions apply).
California Tax Credits & Deductions
California offers several tax credits that can reduce your tax liability:
Renter's Credit
Eligible renters can claim up to $120 ($60 for single filers) if they meet income requirements and paid rent for at least half the year.
Young Child Tax Credit
Families with children under 6 years old may qualify for up to $1,083 per child, depending on income level.
Earned Income Tax Credit
California's EITC supplements the federal credit, providing additional relief for low-to-moderate income workers.
Dependent Exemption Credit
Unlike federal taxes (which eliminated personal exemptions), California still offers exemption credits for dependents.
Frequently Asked Questions
Real-World Examples
📊 Example 1: Single Filer Earning $60,000
- Gross Income: $60,000
- Standard Deduction: -$5,363
- Taxable Income: $54,637
- Estimated California Tax: ~$1,985
- Effective Rate: 3.31%
This taxpayer falls into the 8% bracket but pays a much lower effective rate due to the progressive structure.
📊 Example 2: Married Couple Earning $120,000
- Gross Income: $120,000
- Standard Deduction: -$10,726
- Taxable Income: $109,274
- Estimated California Tax: ~$4,892
- Effective Rate: 4.08%
Even at $120K, this couple's effective rate is relatively modest compared to the 8% marginal bracket.
📊 Example 3: High Earner at $500,000
- Gross Income: $500,000 (single)
- Standard Deduction: -$5,363
- Taxable Income: $494,637
- Estimated California Tax: ~$48,200
- Effective Rate: 9.64%
High earners face California's steep progressive rates, with income over $698,271 taxed at 12.3% or higher.
Tax Planning Tips for California Residents
💰 Maximize Retirement Contributions
Contributing to a 401(k) or traditional IRA reduces your California taxable income. At the 9.3% bracket, every $1,000 contributed saves $93 in state taxes (plus federal savings).
🏠 Claim Renter's Credit
Don't forget the renter's credit if you qualify. It's a direct reduction of your tax bill, not just a deduction from income.
📚 Education Savings
While California doesn't offer a 529 plan deduction, contributions grow tax-free and withdrawals for education expenses are exempt from state tax.
💼 Track Business Expenses
Self-employed Californians can deduct business expenses on both federal and state returns, reducing taxable income at high marginal rates.
Related California Tax Resources
Federal Income Tax Calculator 2025-26
CalculatorCalculate your federal income tax alongside your California state tax for complete tax planning.
Federal Take-Home Pay Calculator
CalculatorEstimate your net pay after federal taxes, FICA, and other deductions.
California Tax Calculator 2024-25
Previous YearCalculate taxes for the previous tax year for comparison or amended returns.
📝 Important Disclaimer
This calculator provides estimates based on the 2025-26 California tax brackets and standard deductions. Your actual tax liability may differ based on itemized deductions, credits, alternative minimum tax (AMT), and other factors. For personalized tax advice, consult a licensed California tax professional or CPA. Tax laws change frequently—always verify current rates with the California Franchise Tax Board (FTB).
Need Help Filing Your California Taxes?
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