Disclaimer: Calculations are estimates based on tax rates as of Dec. 2021 and data from the Tax Foundation. These rates are subject to change. Check the IRS website for the latest information about income taxes and your state tax website for state-specific information. Our calculator doesnt consider both 401k and IRA deductions due to the tax law limitations. Please note, the amount of your IRA deductions may vary. You should speak with a tax professional to determine your tax situation.
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What You Need To Know About California State Taxes
The state of California requires you to pay taxes if you are a resident or nonresident that receives income from a California source. The state income tax rates range from 1% to 12.3%, and the sales tax rate is 7.25% to 10.75%.
California state offers tax deductions and credits to reduce your tax liability, including a standard deduction, itemized deduction, the earned income tax credit, child and dependent care credit and college access tax credit.
California Income Tax Brackets and Rates: Single or Married/Registered Domestic Partner Filing Separately
California Income Tax Brackets and Rates: Married/Registered Domestic filing jointly and Qualified Widow(er)
California Income Tax Brackets and Rates: Head of Household
Income Tax Deductions for California
The state of California offers a standard and itemized deduction for taxpayers. The 2020 standard deduction allows taxpayers to reduce their taxable income by $4,601 for single filers ($9,202 for married filing jointly, head of household and qualifying widowers).
A taxpayer may qualify for the itemized deduction if the amounts exceed the standard deduction. The state of California allows for itemized deductions as follows:
- Medical and dental expenses
- Mortgage interest on home purchases up to $1,000,000
- Job expenses and certain miscellaneous expenses
- Gambling losses are deductible to the extent of gambling winnings
Disaster Loss Deduction
A taxpayer may deduct a casualty loss caused by a disaster declared by the President or the governor. The damage must be sudden, unexpected or unusual from an earthquake, fire, flood or similar event. You can claim a casualty loss if you do not receive an insurance or other type of reimbursement for the property destroyed or damaged.
The state of California allows for a disaster loss suffered in California.
You can claim a deduction for the amount you contribute to an individual retirement account (IRA). The State of California follows the same federal guidelines for IRA contributions.
California State Income Tax Credits
Earned Income Tax Credit: The CalEITC or YCTC Tax Credits
You can claim the California Earned Income Tax Credit (CalEITC) if you work and have low income (up to $30,000), both credits are a refundable credit. The amount of the credit ranges from $243 to $3,027. You can also qualify for the Young Child Tax Credit if you have a qualifying child under the age of 6. If you qualify for the young child tax credit, you may receive up to $1,000.
The Child and Dependent Care Credit
You can claim the child and dependent care credit if you paid someone to care for your child, a dependent or spouse. The credit is a nonrefundable credit, which means it can only reduce up to the amount that you owe in taxes.
The College Access Tax Credit
The State of California allows taxpayers to contribute to a state tax fund, which provides financial aid for low-income students to attend college. Taxpayers who make these contributions can claim up to 50% of their contributions on the tax return. This credit is a nonrefundable tax credit.
The Child Adoption Tax Credit
If you adopted a child during the taxable year, you can claim up to 50% of adoption costs paid.
Nonrefundable Rental Credit
You can claim a nonrefundable tax credit for rent paid up to half of the year. The credit is $60 if you are single or married/registered domestic partner separately ($120 for other filers).
Senior Head of Household Tax Credit
You may qualify for this credit if you are 65 or older and meet certain qualifications. The maximum amount you can claim for this credit is $1,499.
Do I Have to Pay Income Tax in California?
You are required to file a California tax return if you receive income from California, have income above a certain income threshold, and you fall into one of the following categories:
You are considered a resident if you are one of the following:
- You reside in California for other than a temporary time period
- You reside in California but are away for a temporary time period
Sales Tax and Sales Tax Rates
California charges sales taxes from 7.25% to 10.75%.
Property Taxes and Property Tax Rates
Property Tax Exemptions
California provides property tax exemptions for homeowners, veterans, nonprofit and religious organizations, public schools, landlords and personal property (such as qualifying works of art).
Capital Gains Taxes
California allows taxpayers to report gains and losses from the sale of capital assets. Unlike federal income taxes, which allow taxpayers to have capital gains taxed at lower rates, the state of California taxes capital gains as ordinary income.
Inheritance and Estate Tax and Inheritance and Estate Tax Exemption
California does not have an inheritance or estate tax.