California residents are subject to state income taxes. The state uses a graduated-rate income tax system, meaning the more money you earn, the higher your tax rate. This guide shows you all the tax brackets in the state, who needs to file California taxes and the sales tax rate.

California personal income tax rates: Table

California has nine tax brackets: 1%, 2%, 4%, 6%, 8%, 9.3%, 10.3%, 11.3% and 12.3%. Here are the rates and brackets for the 2021 tax year, which you’ll file in 2022, via the California Franchise Tax Board.

California personal income tax rates
Tax rate Single, married filing separate Married filing jointly
1.0% $0-$9,325 $0-$18,650
2.0% $9,326-$22,107 $18,651-$44,214
4.0% $22,108-$34,892 $44,215-$69,784
6.0% $34,893-$48,435 $69,785-$96,870
8.0% $48,436-$61,214 $96,871-$122,428
9.3% $61,215-$312,686 $122,429-$625,372
10.3% $312,687-$375,221 $625,373-$750,442
11.3% $375,222-$625,369 $750,443-$1,250,738
12.3% $625,370 or more $1,250,739 or more
Source: California Franchise Tax Board

The standard deduction in California is $4,803 for single filers and $9,606 for married households.

Don’t forget about your federal filing! Learn tax season basics and see what’s changed in 2022 with our new video series.

Who has to file California state taxes?

If you were a resident of California for any part of the tax year and earned income while there, you should file a state tax return. You might also need to file if you didn’t live in California but worked for a company based in the state. The State of California Franchise Tax Board can help you determine your filing eligibility. While there, you can file your return online, make tax payments and much more.

Businesses residing in California must also file a tax return. The top corporate income tax rate is 8.84 percent, according to the Tax Foundation. Overall, the state ranks 48th in the Tax Foundation’s State Business Tax Climate Index Rating.

California sales tax rate: Table

California has one of the highest sales tax rates nationwide.

California sales tax rates
Sales tax rate National rank
7.25% 1
Source: Tax Foundation

California assesses a 7.25 percent tax on the purchase of tangible personal property, such as clothing and furniture, and localities charge an average of 1.43 percent on top of that.

Other things to know about California state taxes

California has its version of the Earned Income Tax Credit. To qualify, you must reside in California for the majority of the year, have taxable income below a certain threshold, and have a filing status other than married filing separately.

Qualifying residents could see a reduction of their overall tax liability. The State of California Tax Franchise Board notes that for tax year 2020 households making up to  $30,000 could qualify for a tax credit of up to $3,026. You can check its website for 2021 updates, eligibility and estimated benefit amounts.

California’s gasoline tax is the highest in the nation at 51.1 cents per gallon . And if you smoke, you’ll pay a cigarette tax of $2.87 per 20-pack, according to the Tax Foundation.

The State of California Tax Franchise Board is a wise resource to turn to for information about tax requirements, filing online and paying any liabilities owed.

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