California state income tax
California has a state income tax. It is graduated, with a top marginal rate of 13.3%. Nine graduated brackets from 1% to 12.3%, plus an additional 1% tax on taxable income above $1,000,000 (the Behavioral Health Services Tax, formerly the Mental Health Services Tax), for a top effective marginal rate of 13.3%. Capital gains are taxed as ordinary income (no special lower rate).
Does California have a state income tax?
Yes. California taxes individual income on a graduated schedule topping out at 13.3%. Nine graduated brackets from 1% to 12.3%, plus an additional 1% tax on taxable income above $1,000,000 (the Behavioral Health Services Tax, formerly the Mental Health Services Tax), for a top effective marginal rate of 13.3%.
| Item | California |
|---|---|
| State income tax | Yes, graduated |
| Top marginal rate | 13.3% |
| Capital gains | Taxed as ordinary income, up to 13.3% |
| State sales tax | 7.25% (plus local) |
| Avg. property tax rate | 0.71% of home value |
| Estate / inheritance tax | None |
How does California tax capital gains?
California has no separate, lower rate for capital gains. They are taxed as ordinary income at the same rates as your wages, up to 13.3%, on top of federal capital gains tax. See how capital gains tax works in 2026.
What about retirement income in California?
Retirement income is taxed differently from wages in many states. For how California treats Social Security, pensions, and 401(k)/IRA withdrawals, see California retirement taxes.
Sources
- California income tax rates and brackets: California Department of Revenue / Taxation.
- California capital gains treatment: California tax authority.
- California sales tax: California Department of Revenue.