What Is The Current Income Tax Rate In California?
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Income tax is a form of taxation imposed by the federal and state governments in the United States. It is based on the income of individuals and businesses, and is usually calculated as a percentage of their total earnings. In California, income tax is levied on all residents and nonresidents who receive wages or other compensation from within the state.
California Income Tax Rates
The tax rate in California is determined by the amount of income earned in the state, with rates ranging from 1% to 13.3%. The tax rate is determined by the California Franchise Tax Board (FTB) and is based on the taxpayer’s adjusted gross income (AGI). The table below shows the tax rate for California residents.
California Income Tax Rates for Tax Year 2020
Taxable Income
Tax Rate
$0 - $8,544
1%
$8,544 - $20,255
2%
$20,255 - $31,969
4%
$31,969 - $44,377
6%
$44,377 - $56,085
8%
$56,085 - $286,492
9.3%
$286,492 - $343,788
10.3%
$343,788 - $572,980
11.3%
$572,980 - $1,000,000
12.3%
$1,000,000+
13.3%
California Income Tax Exemptions
In addition to the income tax rates, California also allows for certain exemptions that can help reduce a taxpayer’s liability. For example, Californians who are over the age of 65, blind or disabled are eligible for a personal exemption of up to $1,222 for their filing status. Additionally, taxpayers with dependents may also be eligible for exemptions of up to $2,500 per dependent.
How to File California Income Tax
Taxpayers can file their California income tax returns either electronically or by mail. To file electronically, taxpayers must use the state’s free e-file system, which is available through the FTB website. Taxpayers may also choose to file their returns by mail. For those filing by mail, the FTB provides forms and instructions for completing the return.
California Estimated Tax Payments
In addition to filing an income tax return, taxpayers may also be required to make estimated tax payments throughout the year. Estimated tax payments are due on April 15, June 15, September 15, and January 15 of the following year. Taxpayers must make estimated payments in order to avoid penalties and interest charges.
California Tax Extensions
Taxpayers who are unable to file their California income tax return by the April 15 deadline may be eligible for a 6-month extension. To request an extension, taxpayers must complete Form 3519 and submit it to the FTB by the April 15 deadline. Extensions are granted at the discretion of the FTB and are not guaranteed.
California Tax Refunds
In most cases, taxpayers who file their California income tax return will receive a refund. The amount of the refund is based on the amount of taxes paid and the amount of taxes due. Refunds are typically issued within 8 to 12 weeks of filing the return.
Conclusion
California has a progressive income tax system with rates ranging from 1% to 13.3%. In addition to the tax rate, California also offers exemptions for certain taxpayers and allows for estimated tax payments and tax extensions. Most taxpayers who file their return will receive a refund. Knowing the current income tax rate in California can help taxpayers ensure that they are paying the correct amount of taxes and take advantage of the exemptions and other benefits offered by the state.