California State Taxes 2021-2022: Income And Sales Tax Rates

California taxes the military retirement income of residents. Active-duty pay is taxed like normal income if you are a resident of the state. California has nine state income tax rates, ranging from 1% to 12.3%. The state also levies a 1% mental health services tax on income exceeding $1 million. “California cannot withhold federal income tax payments because taxpayers remit their federal income taxes directly to the Internal Revenue Service,” Walczak said.

• California has ten marginal tax brackets, ranging from 1% (the lowest California tax bracket) to 13.3% (the highest California tax bracket).
• If your state tax witholdings are greater then the amount of income tax you owe the state of California, you will receive an income tax refund check from the government to make up the difference.
• As a result of California’s tax expansion, the state’s top income tax bracket has increased by 1.1%, to 14.4% for the 2024 tax year.
• As part of the Mental Health Services Act, this tax provides funding for mental health programs in the state.
• Some states have a progressive tax, while others have a flat tax.
• California’s gasoline tax is the highest in the nation at 51.1 cents per gallon .

Tax Data Sources:

Many cities and counties also enact their own sales taxes, ranging from 1.25% to 4.75%. The table below shows state and county tax rates for each of the online bookkeeping 58 counties in California. If you received a gift or inheritance, it should not be included in your income. But if the gift or inheritance later produces income, you will need to pay taxes on that income.California does not have an estate tax; however, an estate is subject to income taxes.

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Start one or more free state income tax calculators and get an estimate of your state taxes. We are an independent, advertising-supported comparison service. Although sales tax is high in California, california state income tax residents don’t need to pay tax on certain items.

• Tax credits are benefits that decrease taxes owed by the credit amount.
• Your residency status also determines what portion of your income the state will tax.
• The table below further demonstrates tax rates for Californians.
• The top 14.4% income tax rate applies to all California employees with income exceeding $1 million, regardless of filing status.
• Among the products on which sales taxes are not required are most groceries, prescription medicine and utilities like gas and electricity.
• California extends its generosity through standard deductions and exemptions, much like the warm, inviting rays of its ever-present sun.
• California has its version of the Earned Income Tax Credit.

California earned income tax credit (CalEITC)

Once you’ve filed your tax return, all you have to do is wait for your refund to arrive. If you want to check the status of your California tax refund, you can visit the California Income Tax Refund page. California’s reputation as a high-tax state is built in part on generally high prices that sometimes result in higher tax bills on lower-taxed items. https://www.bookstime.com/ California also has one of the highest sales tax rates in the U.S., especially on gasoline. California also charges a mental health services surcharge tax of 1% on incomes over $1 million, over and above the regular tax rate for residents and certain non-residents with incomes over that threshold.

CalFile – File return for free

For comparison purposes, however, your California tax bracket is the tax bracket in which your last earned dollar in any given tax period falls. California seniors can claim an additional exemption credit on their state income taxes if they are 65 or older by Dec. 31, 2023. If you’ve submitted your California state income tax return and are due a refund, there are several ways to keep tabs on the processing of your funds. The California Franchise Tax Board runs its own refund tracking service, similar to the federal “Where’s My Refund?” tool. To use the tracker, you’ll need to enter your Social Security number, ZIP code, the exact refund amount you’re expecting, and your mailing address.

• California also has one of the highest sales tax rates in the U.S., especially on gasoline.
• Each marginal rate only applies to earnings within the applicable marginal tax bracket.
• California offers a standard and itemized deduction for taxpayers.
• These state income tax rates apply to income earned in 2024, which is reported on tax returns filed in 2025.
• California’s income taxes are the highest in the country with the top three income brackets paying 10.30%, 11.30%, and 12.30% respectively.
• Technically, you don’t have just one “tax bracket” – you pay all of the California marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

That’s the highest rate in the U.S., but it only applies to income earners with over $1 million in taxable income. The table below further demonstrates tax rates for Californians. 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’s free eFile program allows all California taxpayers to instantly file their income tax return over the internet. California provides several free resources for eFile users, including ReadyReturn (which can automatically generate simple tax returns for you), and CalFile, a free software program offered by the Franchise Tax Board.