California State Income Tax Overview

California has the highest top marginal state income tax rate in the country at 13.3%, applied to income above $1 million for single filers. The state uses nine graduated brackets ranging from 1% to 13.3%. Here is how the 2025 California income tax brackets work for single filers: 1% on income up to $10,756; 2% on $10,757–$25,499; 4% on $25,500–$40,245; 6% on $40,246–$55,866; 8% on $55,867–$70,606; 9.3% on $70,607–$360,659; 10.3% on $360,660–$432,787; 11.3% on $432,788–$721,314; 12.3% on $721,315–$999,999; and 13.3% on income above $1,000,000. Married couples filing jointly have thresholds at roughly double these amounts up to the millionaire surcharge. California's standard deduction is notably low at just $5,202 for single filers and $10,404 for married couples — meaning most residents pay state income tax on a larger share of their earnings than in states with higher deductions. To illustrate with a real example: a single Californian earning $80,000 in taxable income owes approximately $4,992 in state income tax — an effective rate of about 6.2%, even though their highest dollar is taxed at 9.3%. California does not conform to many federal tax deductions, including the federal standard deduction, so residents must use California-specific rules when filing Form 540. The state fully taxes capital gains as ordinary income and does not offer a separate lower rate for long-term gains. Social Security benefits are exempt from California state income tax regardless of income level, which is a meaningful benefit for retirees.