Personal income tax
California collects income tax from its residents at the following rates.
For single and married filing separately taxpayers:
- 1 percent on the first $7,749 of taxable income.
- 2 percent on taxable income between $7,750 and $18,371.
- 4 percent on taxable income between $18,372 and $28,995.
- 6 percent on taxable income between $28,996 and $40,250.
- 8 percent on taxable income between $40,251 and $50,869.
- 9.3 percent on taxable income between $50,870 and 259,844.
- 10.3 percent on taxable income between $259,845 and 311,812.
- 11.3 percent on taxable income between $311,813 and $519,687.
- 12.3 percent on taxable income of $519,688 and above.
A 1 percent surcharge, the Mental Health Services Tax, is collected on taxable incomes of $1 million or more, making California's highest marginal rate 13.3 percent.
For married persons filing joint returns and heads of households, the rates remain the same but the income brackets are doubled.
Residents must complete returns on Form 540 2EZ or Form 540. Nonresidents or part-year residents should file 540NR Short Form or 540NR Long Form. The deadline for all forms is April 15. When that date falls on a weekend or holiday, filers get until the next business day to submit their state returns.
You might be able to file your California return electronically at no cost using CalFile if you meet the program's eligibility requirements.
California's previous free filing option Ready Return has been rolled into CalFile.
California's minimum combined state, county and local sales and use tax rate increased to 7.5 percent (6.5 percent state-only portion and 1 percent collected by localities) on Jan. 1, 2013, due to voter approval in November 2012 of Proposition 30.
Rates will be higher in cities and counties with special taxing districts. Publication 71 lists combined sales tax rates for California cities and counties.
Many business owners believe gift wrapping is a nontaxable service. However, unless it is food products that were sold in a nontaxable transaction, sales tax generally applies to gift-wrapping charges. Publication 106 contains more information.
Personal and real property taxes
In the state of California, all real property is taxable and shall be assessed at fair market value.
Any homestead exemptions are handled at the county level and residents must contact the local county tax assessor's office to inquire.
The state's property tax postponement program allows eligible homeowners (senior citizens and blind or disabled residents) to postpone payment of property taxes on their principal place of residence. Applications may be filed with the State Controller's Office beginning Sept. 1, 2016. Some California counties also may offer a property tax postponement program for properties located in the county.
California previously offered a homeowner and renter assistance program under which a once-a-year payment was made to qualified individuals based on part of the property taxes assessed and paid on their homes or paid indirectly as part of their rent. However, this program was suspended due to budget constraints.
Check the state's homeowner and renter assistance program Web page periodically for program updates.
Inheritance and estate taxes
California has no inheritance tax, and its estate tax has been phased out in connection with federal estate tax law changes. Executors of estates of persons who died on or after Jan. 1, 2005, are no longer required to file a California estate tax return.
There is no inheritance tax in California.
Other California tax facts
California gives taxpayers the option to make voluntary fund contributions to more than a dozen nonprofit programs.
California taxpayers can check the status of their refunds by using the state's interactive Web page.
No intangible personal property taxes are levied in California.