Disclaimer: Calculations are estimates based on tax rates as of Jan. 2023 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 doesn’t 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
Generally, 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 offers tax deductions and credits to reduce your state tax liability, including a standard deduction, itemized deduction, the California earned income tax credit, child and dependent care credit and college access tax credit.
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California Income Tax Brackets and Rates: Single or Married/Registered Domestic Partner Filing Separately
| If your California taxable income is over: | But not over: | Your tax is: |
|---|---|---|
| $0 | $10,412 | 1% of your income |
| $10,412 | $24,684 | $104.12 + 2% of the excess over $10,412 |
| $24,684 | $38,959 | $389.56 + 4% of the excess over $24,684 |
| $38,959 | $54,081 | $960.56 + 6% of the excess over $38,959 |
| $54,081 | $68,350 | $1,867.88 + 8% of the excess over $54,081 |
| $68,350 | $349,137 | $3,009.40 + 9.3% of the excess over $68,350 |
| $349,137 | $418,961 | $29,122.59 + 10.3% of the excess over $349,137 |
| $418,961 | $698,271 | $36,314.46 + 11.3% of the excess over $418,961 |
| $698,271 | -- | $67,876.49 + 12.3% of the excess over $698,271 |
California Income Tax Brackets and Rates: Married/Registered Domestic Partner Filing Jointly or Qualified Widow(er)
| If your California taxable income is over: | But not over: | Your tax is: |
|---|---|---|
| $0 | $20,824 | 1% of your income |
| $20,824 | $49,368 | $208.24 + 2% of the excess over $20,824 |
| $49,368 | $77,918 | $779.12 + 4% of the excess over $49,368 |
| $77,918 | $108,162 | $1,912.12 + 6% of the excess over $77,918 |
| $108,162 | $136,700 | $3,735.76 + 8% of the excess over $108,162 |
| $136,700 | $698,274 | $6,018.80 + 9.3% of the excess over $136,700 |
| $698,274 | $837,922 | $58,245.18 + 10.3% of the excess over $698,274 |
| $837,922 | $1,396,542 | $72,628.92 + 11.3% of the excess over $837,922 |
| $1,396,542 | -- | $135,752.98 + 12.3% of the excess over $1,396,542 |
California Income Tax Brackets and Rates: Head of Household
| If your California taxable income is over: | But not over: | Your tax is: |
|---|---|---|
| $0 | $20,839 | 1% of your income |
| $20,839 | $49,371 | $208.39 + 2% of the excess over $20,839 |
| $49,371 | $63,644 | $779.03 + 4% of the excess over $49,371 |
| $63,644 | $78,765 | $1,349.95 + 6% of the excess over $63,644 |
| $78,765 | $93,037 | $2,257.21 + 8% of the excess over $78,765 |
| $93,037 | $474,824 | $3,398.97 + 9.3% of the excess over $93,037 |
| $474,824 | $569,790 | $38,905.16 + 10.3% of the excess over $474,824 |
| $569,790 | $949,649 | $48,686.66 + 11.3% of the excess over $569,790 |
| $949,649 | -- | $91,610.73 + 12.3% of the excess over $949,649 |
Income Tax Deductions for California
Standard Deduction
California offers a standard and itemized deduction for taxpayers. The 2023 standard deduction allows taxpayers to reduce their taxable income by $5,363 for single filers or couples filing separately ($10,726 for married filing jointly, head of household and qualifying surviving spouses).
Itemized Deductions
A taxpayer may qualify for the itemized deduction if the amounts exceed the standard deduction. 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, which 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 reimbursem*nt or other type of reimbursem*nt for the property that is destroyed or damaged.
The state of California allows a deduction for a disaster loss suffered in California.
IRA Deduction
You can claim a deduction for the amount you contribute to an individual retirement account (IRA). California follows the 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 $30,950). The amount of the credit ranges from $285 to $3,529. You can also qualify for the young child tax credit (YCTC) if you if you earn less than $30,931 and have a qualifying child under the age of 6. If you qualify for the YCTC, you may receive up to $1,117. Both credits are refundable.
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 while you worked. The credit is nonrefundable, which means it can offset only the amount that you owe in taxes.
The College Access Tax Credit
California allows taxpayers to contribute to a state fund that provides financial aid for low-income students to attend college. Taxpayers who make these contributions can claim up to 50% of their contributions on their tax return. This is a nonrefundable tax credit.
The Child Adoption Tax Credit
If you adopted a child during the tax year, you can claim up to 50% of adoption costs paid. The maximum credit is $2,500 per child.
Nonrefundable Rental Credit
You can claim a nonrefundable tax credit for rent paid for at least half of the year. The credit is $60 if you are single or married filing separately; for other filers, the credit is $120. Income limits apply.
Senior Head of Household Tax Credit
You may qualify for this credit if you are 65 or older and meet certain requirements. The maximum amount you can claim for this credit is $1,748.
Do I Have to Pay Income Tax in California?
You are required to file a California tax return if you receive income from California sources, have income above a certain threshold and fall into one of the following categories:
Residency Status
You are considered a resident if you are one of the following:
- You reside in California for a purpose that is not temporary or transitory.
- You reside in California but are away temporarily.
Sales Tax and Sales Tax Rates
California charges sales taxes ranging 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 owners of qualifying personal property (such as certain artworks).
Capital Gains Taxes
California allows taxpayers to report gains and losses from the sale of capital assets. Unlike federal income taxes, which may involve lower rates on capital gains, 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.
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California State Taxes
California requires residents and nonresidents who receive income from a California source to pay state taxes. The state income tax rates in California range from 1% to 12.3%. Additionally, the sales tax rate in California varies from 7.25% to 10.75% [[1]].
Tax Deductions and Credits in California
California offers various deductions and credits to reduce state tax liability. These include:
- Standard Deduction: The 2023 standard deduction in California allows taxpayers to reduce their taxable income by $5,363 for single filers or couples filing separately, and $10,726 for married filing jointly, head of household, and qualifying surviving spouses [[2]].
- Itemized Deductions: Taxpayers may qualify for itemized deductions if the amounts exceed the standard deduction. California allows itemized deductions for medical and dental expenses, mortgage interest on home purchases up to $1,000,000, job expenses, certain miscellaneous expenses, gambling losses (up to the extent of gambling winnings), and disaster loss deduction [[2]].
- IRA Deduction: Taxpayers can claim a deduction for the amount contributed to an individual retirement account (IRA) in California, following federal guidelines [[2]].
- Earned Income Tax Credit (CalEITC) and Young Child Tax Credit (YCTC): The CalEITC is available for individuals with low income (up to $30,950), and the amount of the credit ranges from $285 to $3,529. The YCTC is available for individuals earning less than $30,931 and having a qualifying child under the age of 6. Both credits are refundable [[2]].
- Child and Dependent Care Credit: This credit can be claimed if someone paid for the care of a child, dependent, or spouse while working. The credit is nonrefundable and can offset the amount owed in taxes [[2]].
- College Access Tax Credit: Taxpayers can contribute to a state fund that provides financial aid for low-income students to attend college. Contributions can be claimed as a nonrefundable tax credit, up to 50% of the contributions made [[2]].
- Child Adoption Tax Credit: Individuals who adopted a child during the tax year can claim up to 50% of the adoption costs paid, with a maximum credit of $2,500 per child [[2]].
- Nonrefundable Rental Credit: Taxpayers can claim a nonrefundable tax credit for rent paid for at least half of the year, with credit amounts varying based on filing status and income limits [[2]].
- Senior Head of Household Tax Credit: Individuals aged 65 or older who meet certain requirements may qualify for this credit, with a maximum claim amount of $1,748 [[2]].
Filing Requirements in California
You are required to file a California tax return if you receive income from California sources, have income above a certain threshold, and fall into one of the following categories: resident, part-year resident, or nonresident. The residency status is determined based on factors such as residing in California for a purpose that is not temporary or transitory [[3]].
Sales Tax in California
California charges sales taxes ranging from 7.25% to 10.75% [[4]].
Property Taxes in California
California provides property tax exemptions for homeowners, veterans, nonprofit and religious organizations, public schools, landlords, and owners of qualifying personal property, such as certain artworks [[5]].
Capital Gains Taxes in California
California taxes capital gains as ordinary income, unlike federal income taxes that may involve lower rates on capital gains [[5]].
Inheritance and Estate Tax in California
California does not have an inheritance or estate tax [[5]].
Please note that the information provided is based on this article, and tax laws and rates are subject to change. It's always a good idea to consult a tax professional or refer to the official IRS and state tax websites for the most up-to-date and accurate information.
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