How much you pay in California state income taxes depends on your net taxable income and filing status. Residents, part-year residents, and nonresidents of California who collect income and are required to file a federal tax return generally must also file a state tax return. Quick tip: Like the federal government, California has several tax credits and deductions that can help you lower your personal income tax bill. In 2019, the top 1% of earners paid nearly 45% of all personal income taxes. The graduated tax system and millionaire's tax ensure that the highest-income households in California pay the largest share. "This means that those earning over $1 million per year are paying more than 50% of this higher income in state and federal taxes," Reams says. "The good news for lower and middle-class earners is that the tax burden in California is much less than in other states," says Lee Reams, the founder and CEO of TaxBuzz, a platform that connects people with tax and accounting professionals and publishes tax news.įor people with incomes above $1 million, there's an additional 1% tax that raises money for the state's mental health services, bringing California's top tax rate to 13.3%. That means you pay different rates on chunks of your income (after subtracting all the deductions you qualify for). For the 2022-2023 tax year, California estimated it would collect more than $130 billion in personal income tax, comprising about two-thirds of the state's revenue.Ĭalifornia uses a graduated, or progressive tax system, with nine brackets that apply to taxable income: 1%, 2%, 4%, 6%, 8%, 9.3%, 10.3%, 11.3%, and 12.3%. The personal income tax is California's largest revenue source, according to the governor's budget summary. See Insider's picks for the best tax software > How does California tax income? The Golden State has the highest top tax rate in the country at 13.3%, which includes an extra tax on people with incomes exceeding $1 million. Personal income tax is collected in most US states, including California.
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