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State tax docs / States / California

California state income tax: engine rules, 2026

How the QuantCalc engine computes California tax for tax year 2026, rule by rule, with the official source for each rule. Verification status: Worksheet-tested (what this means).

On this page: How the tax is computed · Rate schedule · Deductions, exemptions and credits · Age 65+ subtractions and credits · Social Security · IRA, 401(k) and private pensions · Public pensions · Military retirement pay · Roth conversions · Capital gains · Surtaxes and recapture · Blindness and disability · Part-year and nonresident returns · Worked examples · After 2026 · Not calculated · Verification. Machine-readable: this state's entry in the engine config and the provenance file (key CA).

How the tax is computed

Every step the engine takes for California, in the order it takes them. Steps marked with a filing status or household type apply only there. Each step links the section below that carries California's figures and the official sources for it; the calculation order page describes every step for all jurisdictions.

What each filing status gets, read back from the engine for a household with $1 of income (so below every phase-out and income test):

SingleMarried filing jointlyMarried filing separatelyHead of household
Rate schedule usedsingle schedulejoint schedulejoint schedule, thresholds halvedhead-of-household schedule
Top rate12.3% from $768,21312.3% from $1,536,42612.3% from $768,21312.3% from $1,044,771
Standard deduction, under 65$5,900$11,800$5,900$11,800
Standard deduction at 70 (joint: both 70)$5,900$11,800$5,900$11,800
Personal exemptionnonenonenonenone
Age subtractions at 70 (joint: both 70)nonenonenonenone
  1. Per-person mode joint returns with the spouse's age given On a joint return with the spouse's age given, every age test the state applies per taxpayer is evaluated for each spouse at their own age. Without it one household age applies to both.
    engine step (compute_state_tax_detail). Engine convention, no external source: The engine cannot know the second spouse's age unless told.
  2. Blindness and disability, per person only when the caller says a person is blind or disabled The filer is person one; the spouse counts only on a joint return and only when the caller says so (there is no household convention as for age). Where a state lets a disabled person (and, where it says so, a blind one, or one whose spouse is disabled) qualify for its general retirement exclusion before the age, that person is treated as having reached the age for that exclusion only. Of the 42 taxing jurisdictions, these have a blind amount: Arizona, Arkansas, California, Colorado, Delaware, the District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, North Dakota, Oklahoma, Oregon, Utah, Vermont and Virginia; these have none: Alabama, Connecticut, Georgia, Louisiana, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, West Virginia and Wisconsin. A disability route is calculated in Arkansas, the District of Columbia, Georgia, Hawaii, Idaho, Iowa, Maryland, Michigan, New Jersey, Oregon and West Virginia.
    engine step (compute_state_tax_detail). Engine convention, no external source: Who is blind or disabled is the caller's statement; the engine has no household convention for it.
  3. Rate schedule and standard deduction by filing status Single uses the single schedule and deduction; married filing jointly the joint ones. Head of household and married filing separately follow the two steps below.
    California's values · engine step (select_brackets). Sources (Rate schedule): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); 2025 California Tax Rate Schedules (Form 540) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12)
  4. Married filing separately Where the state publishes its own separate schedule, that one (with half the joint deduction unless a separate deduction is set). Where one schedule applies to every status, that schedule unscaled with the single deduction. Otherwise the joint schedule with every threshold and the deduction halved (computed as the joint tax on twice the income, halved).
    California's values · engine step (select_brackets). Sources (Rate schedule): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); 2025 California Tax Rate Schedules (Form 540) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12)
  5. Head of household The state's head-of-household schedule where it has one, else the single schedule; the head-of-household deduction where set, else the single deduction.
    California's values · engine step (select_brackets). Sources (Rate schedule): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); 2025 California Tax Rate Schedules (Form 540) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12)
  6. The income total every income test uses Other ordinary income + retirement distributions (before any exclusion) + conversion + federally taxable Social Security + long-term gains + Railroad Retirement Tier 2. It stands in for federal adjusted gross income in every threshold, cliff and phase-out below; state subtractions do not reduce it.
    engine step (compute_state_tax_detail). Engine convention, no external source: The inputs are the federal AGI components, so their sum is federal AGI for these income types.
  7. Attributing income to each spouse joint returns with each spouse's own amounts given With a caller's split (the API's spouse object), each spouse's own distributions (employer-plan money included), pension, public pension, conversion, wages and military pay; spouse 2's shares are clamped into the household totals and spouse 1 gets the rest. Without a split, in per-person mode, every item is divided 50/50. Social Security is divided by each spouse's own gross benefits where the caller gives spouse.socialSecurityGross, else 50/50; other ordinary income and gains are always divided 50/50 where a rule needs a per-person amount. The split is used only where a state's rule is per taxpayer; household totals stay authoritative for the base and the income tests.
    engine step (compute_state_tax_detail). Engine convention, no external source: Equal attribution is the neutral split when the owner of a dollar is not known.
  8. Early IRA distributions The IRA and employer-plan dollars each person took before 59½: the amount the caller gave, else every such dollar of a person under 59 at the end of the year (none of an older person, or when the age is not given). Where the state keeps its retirement break only for some federal early-withdrawal exceptions, the other early dollars leave the retirement pool and are taxed as ordinary income; the exception is the caller's, else death for a survivor's benefits, disability for a disabled person, else none. Where the state taxes only the part over the IRA basis, the part within it is left out altogether. A kept exception passes the state's IRA age gate. The additional state tax on the early dollars with no exception is added before the credits, or after them where the state says so (next steps).
    California's values · engine step (compute_state_tax_detail). Sources (IRA, 401(k) and private pensions): 2025 Instructions for Schedule CA (540) (checked 2026-10-12); 2025 FTB 3805P instructions (checked 2026-10-12)
  9. Keeping the per-spouse shares inside the household joint returns with each spouse's own amounts given After the public-pension and employer-pension carve-outs, if the two spouses' remaining shares add up to more than the household's exclusion-eligible distributions (an inconsistent split), spouse 1's share is reduced so they do not.
    engine step (compute_state_tax_detail). Engine convention, no external source: Input normalisation.
  10. Military retirement pay The state's military rule runs first, on military pay alone, per taxpayer: each spouse's own pay at their own age when attributed, otherwise half each at the household age on a joint return. Exempt dollars leave the base; the rest become pension dollars for the general retirement rules. Where the state lets a disabled retiree qualify at any age, a disabled person is treated as having reached the rule's age.
    California's values · engine step (compute_state_tax_detail). Sources (Military retirement pay): Revenue and Taxation Code §17132.9 (checked 2026-10-12); 2025 540 ca instructions (checked 2026-10-12); Bill status SB1407 (checked 2026-09-28); Revenue and Taxation Code §17132.10 (checked 2026-10-12); Revenue and Taxation Code 17132.9 (checked 2026-10-12)
  11. One taxpayer's military exemption Exempt: all of it (below the age split, up to the younger cap). Capped: up to the cap for the age tier, plus the earned-income bonus below the age split when the taxpayer's own wages exceed the threshold, less the taxpayer's own Social Security where the rule says so. Percentage: the percentage (below the age split, up to the younger cap). Then the income limit: above it the exemption is lost, or phased out over the range where one is set.
    California's values · engine step (military_exempt_one). Sources (Military retirement pay): Revenue and Taxation Code §17132.9 (checked 2026-10-12); 2025 540 ca instructions (checked 2026-10-12); Bill status SB1407 (checked 2026-09-28); Revenue and Taxation Code §17132.10 (checked 2026-10-12); Revenue and Taxation Code 17132.9 (checked 2026-10-12)
  12. One military cap per joint return joint returns On a joint return the cap is one amount for the couple, over the pay of the spouses who pass the age test, reduced by the household's Social Security where the rule says so, then the income test.
    California's values · engine step (compute_state_tax_detail). Sources (Military retirement pay): Revenue and Taxation Code §17132.9 (checked 2026-10-12); 2025 540 ca instructions (checked 2026-10-12); Bill status SB1407 (checked 2026-09-28); Revenue and Taxation Code §17132.10 (checked 2026-10-12); Revenue and Taxation Code 17132.9 (checked 2026-10-12)
  13. Capital-loss deduction off the base The deduction comes off the other ordinary income (negative income, as Form 1040 line 7a is), so the base and every state-AGI figure summed from it carry it; WI no more than Wisconsin ordinary income (Schedule WD line 28(c)). States whose base is federal taxable income (with the caller's figure) already have it there and take it only once. Engine 1.13.1: the allowed rental loss comes off the same way, on its own line (rental_loss_deduction).
    California's values · engine step (compute_state_tax_detail). Sources (Capital gains): 2025 Instructions for Schedule CA (540) (checked 2026-10-12); 2025 Form 540, California Resident Income Tax Return (checked 2026-10-12); 2025 Schedule D (Form 1040), Capital Gains and Losses (checked 2026-10-12)
  14. Social Security exempt None of the federally taxable benefit enters the base.
    California's values · engine step (ss_amount_in_state_base). Sources (Social Security): 2025 Instructions for Schedule CA (540) (checked 2026-10-12)
  15. Retirement exclusion (household) The distributions eligible for the exclusion go through the exclusion below. Taxable public-pension dollars left by a cap are not eligible; below the IRA age only employer-plan dollars are.
    California's values · engine step (compute_state_tax_detail). Sources (IRA, 401(k) and private pensions): 2025 Instructions for Schedule CA (540) (checked 2026-10-12); 2025 FTB 3805P instructions (checked 2026-10-12)
  16. Conversion taxed or exempt In full-exclusion states a conversion is exempt at the qualifying age (at any age where the state says so). Elsewhere, unless pooled above, it is ordinary income taxed in full.
    California's values · engine step (compute_state_tax_detail). Sources (Roth conversions): 2025 Instructions for Schedule CA (540) (checked 2026-10-12)
  17. Long-term gains in the base Where gains are taxed as ordinary income: net long-term gain less the flat exclusion (never below zero), times the inclusion share. Elsewhere none enters.
    California's values · engine step (compute_state_tax_detail). Sources (Capital gains): 2025 Instructions for Schedule CA (540) (checked 2026-10-12); 2025 Form 540, California Resident Income Tax Return (checked 2026-10-12); 2025 Schedule D (Form 1040), Capital Gains and Losses (checked 2026-10-12)
  18. State taxable income Other ordinary income + Social Security, retirement income, conversion and gains left in the base − standard deduction − personal exemption − age subtractions.
    engine step (compute_state_tax_detail). Engine convention, no external source: The order of subtraction follows the state forms; each amount is sourced at its own step.
  19. No tax at or below zero State taxable income at or below zero returns a tax of 0 (credits are not refundable), unless the state has a tax computed apart from taxable income that still applies (next step).
    engine step (compute_state_tax_detail). Engine convention, no external source: Every credit the engine carries is nonrefundable, so nothing below can make a zero tax negative; each credit is sourced at its own step.
  20. Separate-return scaling married filing separately For the halved-joint rule, taxable income is doubled before the schedule and the result halved.
    California's values · engine step (compute_state_tax_detail). Sources (Rate schedule): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); 2025 California Tax Rate Schedules (Form 540) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12)
  21. The rate schedule Each bracket's rate on the part of taxable income inside it, summed. No rounding: the result is carried in full precision.
    California's values · engine step (apply_state_brackets). Sources (Rate schedule): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); 2025 California Tax Rate Schedules (Form 540) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12)
  22. Additional tax on early distributions The state's share of the federal additional tax on early distributions (the rate on each early dollar with no exception): added before the credits (Arkansas, Nebraska, Vermont), or after them in California and Wisconsin (see the step after the credits).
    California's values · engine step (compute_state_tax_detail). Sources (IRA, 401(k) and private pensions): 2025 Instructions for Schedule CA (540) (checked 2026-10-12); 2025 FTB 3805P instructions (checked 2026-10-12)
  23. Per-exemption credit The credit per exemption: two on a joint return, one otherwise, or the state's own count for a head of household. Where the state sets an income limit there is no credit above it (the joint limit for joint returns and heads of household).
    California's values · engine step (compute_state_tax_detail). Sources (Deductions, exemptions and credits): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12); 2025 California Form 540 booklet (checked 2026-10-12); California Legislature: RTC section 17054.7 (checked 2026-10-12); Revenue and Taxation Code §17054.7 (senior head of household credit) (checked 2026-10-12); 2025 FTB 3514 Booklet: California Earned Income Tax Credit (checked 2026-10-12); California Revenue and Taxation Code section 17052 (checked 2026-10-12); Tax News (October 2026 edition): Senate Bill 1435 - Specified Date Code Maintenance/Conformity 2025 (checked 2026-10-12); California Earned Income Tax Credit (CalEITC) (checked 2026-10-12)
  24. Credit per dependent only when the caller lists dependents A credit per dependent, under the same income cutoff and phase-out as the personal credits where the state has them (each dependent credit loses the same amount per step, floored as a group).
    California's values · engine step (compute_state_tax_detail). Sources (Deductions, exemptions and credits): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12); 2025 California Form 540 booklet (checked 2026-10-12); California Legislature: RTC section 17054.7 (checked 2026-10-12); Revenue and Taxation Code §17054.7 (senior head of household credit) (checked 2026-10-12); 2025 FTB 3514 Booklet: California Earned Income Tax Credit (checked 2026-10-12); California Revenue and Taxation Code section 17052 (checked 2026-10-12); Tax News (October 2026 edition): Senate Bill 1435 - Specified Date Code Maintenance/Conformity 2025 (checked 2026-10-12); California Earned Income Tax Credit (CalEITC) (checked 2026-10-12)
  25. Senior credit The credit per taxpayer at or above the age: two on a joint return at the household age, one per qualifying spouse in per-person mode. A head of household's extra personal credit is not a second senior credit.
    California's values · engine step (compute_state_tax_detail). Sources (Age 65+ subtractions and credits): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); 2025 California Form 540 booklet (checked 2026-10-12); California Legislature: RTC section 17054.7 (checked 2026-10-12)
  26. Credit for blindness only when the caller says a person is blind or disabled The credit for each blind person.
    California's values · engine step (compute_state_tax_detail). Sources (Blindness and disability): 2025 California Form 540 booklet (checked 2026-10-12)
  27. Retiree credits The retirement income credit by the retirement income left in the base (one per return) and a senior credit per return, both while income less exemptions is under the limit; the retirement income credit on the pension income of the persons at the age, at most the base less all Social Security and less household income over the household base; and the senior head of household credit on taxable income, at most the cap, for a filer at the age whose head-of-household qualifying person died in one of the two previous years, while income is at most the limit.
    California's values · engine step (compute_state_tax_detail). Sources (Age 65+ subtractions and credits): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); 2025 California Form 540 booklet (checked 2026-10-12); California Legislature: RTC section 17054.7 (checked 2026-10-12)
  28. Personal, senior and blind credits phased out Above the status threshold each personal, senior and blind credit loses the amount for each step of income (or part of one), not below zero; the separate step applies to married filing separately.
    California's values · engine step (compute_state_tax_detail). Sources (Deductions, exemptions and credits): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12); 2025 California Form 540 booklet (checked 2026-10-12); California Legislature: RTC section 17054.7 (checked 2026-10-12); Revenue and Taxation Code §17054.7 (senior head of household credit) (checked 2026-10-12); 2025 FTB 3514 Booklet: California Earned Income Tax Credit (checked 2026-10-12); California Revenue and Taxation Code section 17052 (checked 2026-10-12); Tax News (October 2026 edition): Senate Bill 1435 - Specified Date Code Maintenance/Conformity 2025 (checked 2026-10-12); California Earned Income Tax Credit (CalEITC) (checked 2026-10-12)
  29. Credits cannot make the tax negative The credits are subtracted and the result floored at zero.
    engine step (compute_state_tax_detail). Engine convention, no external source: Every credit the engine carries is nonrefundable; each credit is sourced at its own step.
  30. Surtax on high income The rate times state taxable income over the filing status's threshold.
    California's values · engine step (compute_state_tax_detail). Sources (Surtaxes and recapture): California Revenue and Taxation Code §17043 (checked 2026-10-12)
  31. Qualifying surviving spouse qualifying surviving spouse returns A qualifying surviving spouse (filingStatus qss) is one person on the return, taxed from the single figures with the state's own treatment of the status laid over them: where the state says so, the joint rate schedule, the joint standard deduction, the joint personal exemption, the joint income limits and phase-outs (only those the state sets for joint returns), the married 65+ and blindness amounts, or the head-of-household return; where the state gives the status nothing of its own, the single return. The federal figures the engine derives for the status are the federal qualifying-surviving-spouse ones (the joint standard deduction, the married 65+ amount).
    California's values · engine step (state_tax_effective_config). Sources (Rate schedule): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); 2025 California Tax Rate Schedules (Form 540) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12)
  32. Railroad Retirement benefits only when the caller gives Railroad Retirement benefits Railroad Retirement benefits are never taxed by a state (45 U.S.C. §231m). Tier 2 (railroadRetirementTier2) is in the income total the tests use but never in the base. Tier 1 (railroadRetirementTier1) is a part of the gross benefits (socialSecurityGross); its share of the taxable benefits is taken out of the Social Security every state rule sees, so a state that taxes Social Security never reaches it. Where a state's worksheet says so, the benefits reduce a retirement cap or subtraction (ID, IN, MD, ME, MN: both tiers; MI: the taxable railroad benefits); Minnesota's and Utah's Social Security rules test an income without them, Minnesota's, New Jersey's and California's retirement income tests an income without Tier 2; Ohio and Delaware test their own AGI everywhere, which never holds the benefits.
    California's values · engine step (compute_state_tax_detail). Sources (Social Security): 2025 Instructions for Schedule CA (540) (checked 2026-10-12)
  33. The capital-loss deduction the state allows With a net capital loss (capitalLoss): the smaller of the loss and the state's limit (the federal $3,000 / $1,500 where the state follows the federal return; MA $2,000, and no more than the interest and dividends); AL the loss less the part carried in, unlimited; PA and NJ none. It comes off the income total the income tests use (and the Social Security worksheets' income); the gross-income filing test (LA) reads the total before it. Engine 1.13.1: with a rental loss (rentalNetIncome below 0, the federal Schedule E line 26 amount) the state allows, the whole loss where the state starts from federal AGI or follows the federal schedule, none in PA and NJ (rental_loss_no_offset): it comes off the same income the same way; a rental profit is other ordinary income.
    California's values · engine step (compute_state_tax_detail). Sources (Capital gains): 2025 Instructions for Schedule CA (540) (checked 2026-10-12); 2025 Form 540, California Resident Income Tax Return (checked 2026-10-12); 2025 Schedule D (Form 1040), Capital Gains and Losses (checked 2026-10-12)
  34. Each spouse's own Social Security joint returns On a joint return, each spouse's own Social Security is the spouse's share of the benefits by spouse.socialSecurityGross when the caller gives it (Tier 1 railroad benefits left out), else half each. It is what the per-spouse rules read: Colorado's per-spouse subtraction, Rhode Island's per-spouse modification, and the Maine, Maryland and other retirement caps reduced by the benefits each spouse received (with each spouse's own railroad benefits where the state counts them).
    California's values · engine step (compute_state_tax_detail). Sources (Social Security): 2025 Instructions for Schedule CA (540) (checked 2026-10-12)
  35. Taxes that survive a zero taxable income Where the state's forms compute them apart from taxable income, the early-distribution tax, the minimum tax and the capital-gains surcharge still apply when taxable income is zero or less: the return goes on with taxable income 0 (no schedule tax), and only the credits the state allows against them reduce them.
    California's values · engine step (compute_state_tax_detail). Sources (Rate schedule): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); 2025 California Tax Rate Schedules (Form 540) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12)
  36. Early-distribution tax after the credits Where the state adds its early-distribution tax after the nonrefundable credits (California, Wisconsin), it is added to the tax left after them, so no credit offsets it.
    California's values · engine step (compute_state_tax_detail). Sources (IRA, 401(k) and private pensions): 2025 Instructions for Schedule CA (540) (checked 2026-10-12); 2025 FTB 3805P instructions (checked 2026-10-12)
  37. Renter's credit (CA) Form 540 line 46: $60 ($120 joint, head of household, surviving spouse), nonrefundable, for a renter at CA AGI at most $55,830 ($111,660), with no property tax given.
    California's values · engine step (st_compute). Sources (Deductions, exemptions and credits): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12); 2025 California Form 540 booklet (checked 2026-10-12); California Legislature: RTC section 17054.7 (checked 2026-10-12); Revenue and Taxation Code §17054.7 (senior head of household credit) (checked 2026-10-12); 2025 FTB 3514 Booklet: California Earned Income Tax Credit (checked 2026-10-12); California Revenue and Taxation Code section 17052 (checked 2026-10-12); Tax News (October 2026 edition): Senate Bill 1435 - Specified Date Code Maintenance/Conformity 2025 (checked 2026-10-12); California Earned Income Tax Credit (CalEITC) (checked 2026-10-12)
  38. Refundable state credits The credits paid beyond the tax (reported in refundableCredits; netTax = totalTax less them): earned income credits as a share of the federal EIC with each state's own age band (OK on the 2020 federal credit, DC's own childless schedule, the CalEITC table, MN's Working Family Credit), the NYC EIC and school tax credits, and the property-tax, renter, grocery and senior credits of MA, MI, NJ, ID, HI, NM, OK, AZ, NY, RI, WV, ME, DC, MN, MO, WI, IN and MT, each on its own income measure. Engine 1.13.1: a part-year NYC resident's school tax credits (the Table 2 proration chart and the rate-reduction amount on IT-360.1 line 47; IT-203 lines 60 / 60a for a part-year state resident).
    California's values · engine step (state_tax_refundable_credits). Sources (Deductions, exemptions and credits): Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (checked 2026-10-12); FTB's Tax News (October 2025) - 2025 Indexing (checked 2026-10-12); 2025 California Form 540 booklet (checked 2026-10-12); California Legislature: RTC section 17054.7 (checked 2026-10-12); Revenue and Taxation Code §17054.7 (senior head of household credit) (checked 2026-10-12); 2025 FTB 3514 Booklet: California Earned Income Tax Credit (checked 2026-10-12); California Revenue and Taxation Code section 17052 (checked 2026-10-12); Tax News (October 2026 edition): Senate Bill 1435 - Specified Date Code Maintenance/Conformity 2025 (checked 2026-10-12); California Earned Income Tax Credit (CalEITC) (checked 2026-10-12)

Rate schedule

Single

Taxable income fromtoRate
$0$11,4561%
$11,456$27,1572%
$27,157$42,8614%
$42,861$59,4986%
$59,498$75,1978%
$75,197$384,1099.3%
$384,109$460,92710.3%
$460,927$768,21311.3%
$768,213and up12.3%

Married filing jointly

Taxable income fromtoRate
$0$22,9121%
$22,912$54,3142%
$54,314$85,7224%
$85,722$118,9966%
$118,996$150,3948%
$150,394$768,2189.3%
$768,218$921,85410.3%
$921,854$1,536,42611.3%
$1,536,426and up12.3%

Head of household

Taxable income fromtoRate
$0$22,9271%
$22,927$54,3162%
$54,316$70,0184%
$70,018$86,6546%
$86,654$102,3568%
$102,356$522,3859.3%
$522,385$626,86410.3%
$626,864$1,044,77111.3%
$1,044,771and up12.3%

Married filing separately: the engine computes the MFJ tax on twice the income and halves it, which is the same as halving every MFJ threshold and the MFJ deduction.

Source review notes (what the sources do not state outright, or what the engine does not carry):

Deductions, exemptions and credits

  • Standard deduction (or the exemption the engine carries in its place): $5,900 single, $11,800 married filing jointly, $11,800 head of household.
  • Nonrefundable credit of $158 per exemption (one for single, two for MFJ).
  • The personal, senior and blind credits each lose $6 for every $2,500 ($1,250 married filing separately), or part of it, of federal adjusted gross income above $252,203 (single and married filing separately), $378,310 (head of household) or $504,411 (MFJ), not below zero.

Source review notes (what the sources do not state outright, or what the engine does not carry):

Age 65+ subtractions and credits

  • An additional nonrefundable credit of $158 per taxpayer at age 65 or older.

Social Security

Social Security benefits are fully exempt: none of the federally taxable amount enters the state base.

API value: socialSecurityRule: "exempt". The engine's input is the federally taxable amount; income tests use the sum of the income components as the adjusted-gross-income proxy.

IRA, 401(k) and private pensions

  • No exclusion: pension, annuity and IRA/401(k) distributions are taxed as ordinary income.

Public pensions

No separate treatment: public pensions follow the rules for other retirement income above.

Source review notes (what the sources do not state outright, or what the engine does not carry):

Military retirement pay

  • Military retirement pay is exempt up to $20,000, with $20,000 per joint return.
  • Income limit: $125,000 ($250,000 joint); above it the exemption is lost.
  • Military pay the military rule does not exempt is pension income under the general retirement rules.
  • Rules are applied per taxpayer at that person's own age when the spouse's age is given. API value: rules.militaryRetirement.treatment: "capped_exclusion".

Roth conversions

A conversion is taxed as ordinary income in full. It does not draw any retirement-income exclusion.

Capital gains

  • Net long-term gain is taxed as ordinary income.
  • Short-term gains are ordinary income.

Surtaxes and recapture

  • An extra 1% on taxable income over $1,000,000 (the same threshold for every filing status); the threshold is not indexed.

Blindness and disability

  • A nonrefundable credit of $153 for each blind person.
  • The API applies these through its blind, disabled, spouse.blind and spouse.disabled fields; absent means false.

Part-year and nonresident returns

  • Part-year resident (Form 540NR): the tax a full-year resident would owe on all the year's income, times the state's income ratio.
  • Nonresident (Form 540NR): the tax a full-year resident would owe on all the year's income, times the state's income ratio.
  • The ratio: the state's own AGI (after its subtractions) of the state's income over the state AGI of the whole year, rounded to 4 places, at most 1.
  • Form 540NR: the tax rate on all taxable income (rounded to four places) × California taxable income (California AGI less the deduction × California AGI / total AGI); the exemption credits × California taxable income / total taxable income; the Behavioral Health Services Tax on California taxable income.
  • A nonresident's retirement income is not taxable by the state (4 U.S.C. §114); the API refuses it in residency.stateIncome. The credit for tax paid to another state and the earned income credits on these returns are not computed.

Married couples whose residency differs (engine 1.13.0)

With residency.spouse on a joint request, each allowed treatment is calculated and reported in residency.couple; tax is the required one, else the state's default, else the couple's residency.election, else the joint return the request's mfj names. Each rule is quoted from the state's instructions (engine 1.14.0: and its statutes, regulations, bulletins and other official guidance) in the sources below.

SpousesCalifornia's rule
One spouse a full-year resident, the other a part-year residenta joint part-year / nonresident return is required.
One spouse a full-year resident, the other a nonresidenta joint part-year / nonresident return, unless the couple elects separate returns; separate returns only when the nonresident spouse had no income from the state.
One spouse a part-year resident, the other a nonresidenta joint part-year / nonresident return, unless the couple elects separate returns; separate returns only when the nonresident spouse had no income from the state.
Both part-year residents, different resident periodsa joint part-year / nonresident return is required.
Both nonresidents, only one with income from the statea joint part-year / nonresident return, unless the couple elects separate returns; separate returns only when the nonresident spouse had no income from the state.

Worked examples

Computed by the engine for the fixed households below (the same ones for every state, so states compare directly). Federal tax is not supplied, so a federal-tax deduction is not taken; the income tests use the sum of the components as income.

Household (engine inputs)State tax
Single, 67: $30,000 private pension, $20,000 IRA, $10,000 interest, $24,000 Social Security ($17,000 federally taxable), $5,000 long-term gain$1,715.08
Married filing jointly, 70: $40,000 public pension, $40,000 IRA, $20,000 interest, $40,000 Social Security ($34,000 federally taxable), $10,000 long-term gain$2,230.16
Single, 60: $60,000 other ordinary income and a $50,000 Roth conversion$5,840.86
Married filing jointly, 66: $30,000 IRA, a $40,000 Roth conversion, $30,000 Social Security ($25,500 federally taxable)$380.60
Single, 58: $36,000 military retirement pay and $30,000 wages$788.30
Married filing jointly, ages 67 and 61: $50,000 IRA, $10,000 interest, $30,000 Social Security ($25,500 federally taxable), each spouse's age given$260.88

Line by line

The intermediate lines the engine records while it computes each example (its detail record, printed as it comes out; lines that are zero are left out). The engine's documentation build checks that the lines add up to the taxable income and the tax, for every state, filing status and a grid of households. Each line links the engine step that produces it.

Single, 67: $30,000 private pension, $20,000 IRA, $10,000 interest, $24,000 Social Security ($17,000 federally taxable), $5,000 long-term gain: $1,715.08
LineAmount
Income total used by the income tests$82,000
+ Other ordinary income in the base$10,000
+ Retirement income in the base$50,000
+ Long-term gain in the base$5,000
− Standard deduction$5,900
= State taxable income$59,100
Tax from the rate schedule$2,031.08
= Tax before credits$2,031.08
Per-exemption credit$158
Senior credit$158
− Credits used (never more than the tax)$316
= Tax$1,715.08
Married filing jointly, 70: $40,000 public pension, $40,000 IRA, $20,000 interest, $40,000 Social Security ($34,000 federally taxable), $10,000 long-term gain: $2,230.16
LineAmount
Income total used by the income tests$144,000
+ Other ordinary income in the base$20,000
+ Retirement income in the base$80,000
+ Long-term gain in the base$10,000
− Standard deduction$11,800
= State taxable income$98,200
Tax from the rate schedule$2,862.16
= Tax before credits$2,862.16
Per-exemption credit$316
Senior credit$316
− Credits used (never more than the tax)$632
= Tax$2,230.16
Single, 60: $60,000 other ordinary income and a $50,000 Roth conversion: $5,840.86
LineAmount
Income total used by the income tests$110,000
+ Other ordinary income in the base$60,000
+ Roth conversion in the base$50,000
− Standard deduction$5,900
= State taxable income$104,100
Tax from the rate schedule$5,998.86
= Tax before credits$5,998.86
Per-exemption credit$158
− Credits used (never more than the tax)$158
= Tax$5,840.86
Married filing jointly, 66: $30,000 IRA, a $40,000 Roth conversion, $30,000 Social Security ($25,500 federally taxable): $380.60
LineAmount
Income total used by the income tests$95,500
+ Retirement income in the base$30,000
+ Roth conversion in the base$40,000
− Standard deduction$11,800
= State taxable income$58,200
Tax from the rate schedule$1,012.60
= Tax before credits$1,012.60
Per-exemption credit$316
Senior credit$316
− Credits used (never more than the tax)$632
= Tax$380.60
Single, 58: $36,000 military retirement pay and $30,000 wages: $788.30
LineAmount
Income total used by the income tests$66,000
Military pay excluded (not in the base)$20,000
+ Other ordinary income in the base$30,000
+ Retirement income in the base$16,000
− Standard deduction$5,900
= State taxable income$40,100
Tax from the rate schedule$946.30
= Tax before credits$946.30
Per-exemption credit$158
− Credits used (never more than the tax)$158
= Tax$788.30
Married filing jointly, ages 67 and 61: $50,000 IRA, $10,000 interest, $30,000 Social Security ($25,500 federally taxable), each spouse's age given: $260.88
LineAmount
Income total used by the income tests$85,500
+ Other ordinary income in the base$10,000
+ Retirement income in the base$50,000
− Standard deduction$11,800
= State taxable income$48,200
Tax from the rate schedule$734.88
= Tax before credits$734.88
Per-exemption credit$316
Senior credit$158
− Credits used (never more than the tax)$474
= Tax$260.88

After 2026: how the amounts move

A request with projection (API) estimates a later tax year from these rules: every dollar amount and age test below moves the way California's law moves it. Rates and the rules themselves stay the 2026 ones (how projection works).

Amounts (engine fields)After 2026What the law says, and the source
brackets_single (the single rate schedule's thresholds), brackets_mfj (the mfj rate schedule's thresholds), brackets_hoh (the hoh rate schedule's thresholds)Indexed: California Consumer Price Index (all items), change from June of the prior year to June of the current year, applied to the preceding year's amounts; the increase rounded to the nearest $1.RTC 17041(h): each year FTB multiplies the preceding year's brackets by the California CPI (June-to-June) inflation factor and rounds to the nearest $1 (joint brackets are twice the single under 17045). Engine 1.12.0 carries the FTB's published 2026 brackets.
  • Cal. Rev. & Tax. Code § 17041 (California Legislative Information, statute): Annual recomputation of the brackets, nearest $1. Quoted: "the percentage change in the California Consumer Price Index for all items from June of the prior calendar year to June of the current calendar year"; "Multiply the preceding taxable year income tax brackets by the inflation adjustment factor determined in subparagraph (A) and round off the resulting products to the nearest one dollar ($1).". Checked 2026-10-12.
  • Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (California Franchise Tax Board, agency_page): The 2026 schedules. Quoted: "2026 California tax rate schedules"; "768,213 & OVER 74,675.27 + 12.30% of the amount over 768,213". Checked 2026-10-12.
std_deduction_single, std_deduction_mfj, std_deduction_hohIndexed: California Consumer Price Index (all items), change from June of the prior year to June of the current year, applied to the preceding year's amounts; the increase rounded to the nearest $1.RTC 17073.5(d): the standard deduction ($1,880 / $3,760 base; HOH and joint twice the single) is recomputed each year by the California CPI factor and rounded to the nearest $1. Engine 1.12.0 carries the FTB's published 2026 amounts ($5,900 / $11,800).
  • Cal. Rev. & Tax. Code § 17073.5 (California Legislative Information, statute): Annual recomputation, nearest $1, joint/HOH = twice single. Quoted: "shall multiply the standard deduction amounts in the preceding taxable year by the inflation adjustment factor determined in paragraph (2), and round off the resulting products to the nearest one dollar ($1)."; "the amount provided in paragraph (2) of subdivision (a) shall be twice the amount provided in paragraph (1) of subdivision (a).". Checked 2026-09-30.
  • Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (California Franchise Tax Board, agency_page): The 2026 standard deductions. Quoted: "Standard deduction for single or married filing separate taxpayers $5,706 $5,900". Checked 2026-10-12.
exemption_credit_per, senior_credit_per, dep_creditIndexed: California Consumer Price Index (all items), change from June of the prior year to June of the current year, applied to the preceding year's amounts; the increase rounded to the nearest $1.RTC 17054(i): the personal, age-65, blind and dependent exemption credits are recomputed each year by the California CPI factor, rounded to the nearest $1 (the joint credit is twice the single). Engine 1.12.0 carries the FTB's published 2026 amounts ($158 personal and senior, $491 dependent).
  • Cal. Rev. & Tax. Code § 17054 (California Legislative Information, statute): Annual recomputation of the credits, nearest $1. Quoted: "shall multiply the immediately preceding taxable year credits by the inflation adjustment factor determined in paragraph (2), and round off the resulting products to the nearest one dollar ($1).". Checked 2026-10-12.
  • Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (California Franchise Tax Board, agency_page): The 2026 personal, senior and dependent credits. Quoted: "Personal exemption credit amount for single, separate, and head of household taxpayers $153 $158"; "Dependent exemption credit $475 $491". Checked 2026-10-12.
credit_senior_min_ageAttained age: the same age in every year.The senior exemption credit is for an individual 65 years of age or over by the end of the taxable year: a fixed attained age.
  • Cal. Rev. & Tax. Code § 17054 (California Legislative Information, statute): Age 65. Quoted: "in the case of an individual who is 65 years of age or over by the end of the taxable year". Checked 2026-10-12.
credit_phaseout_start_single, credit_phaseout_start_mfj, credit_phaseout_start_hohIndexed: California Consumer Price Index (all items), change from June of the prior year to June of the current year, applied to the preceding year's amounts; the increase rounded to the nearest $1. The engine carries the 2025 figure (the latest published) for 2026, so a projection adds 1 year of indexing at the factor's average annual rate.RTC 17054.1(f): the exemption-credit phase-out threshold amounts are recomputed annually in the same manner as the brackets (California CPI, nearest $1). Engine values are 2025.
  • Cal. Rev. & Tax. Code § 17054.1 (California Legislative Information, statute): Thresholds recomputed like the brackets. Quoted: "the threshold amounts specified in subdivision (b) shall be recomputed annually in the same manner as the recomputation of income tax brackets under subdivision (h) of Section 17041". Checked 2026-09-30.
  • Cal. Rev. & Tax. Code § 17041 (California Legislative Information, statute): Bracket method: nearest $1. Quoted: "round off the resulting products to the nearest one dollar ($1).". Checked 2026-10-12.
credit_phaseout_step, credit_phaseout_step_mfs, credit_phaseout_amountFixed in law: held at the rules-year amount in every later year.RTC 17054.1(a): each credit is reduced by $6 ($12 joint) for each $2,500 ($1,250 MFS) of federal AGI over the threshold; only the thresholds are recomputed, so these are fixed.
  • Cal. Rev. & Tax. Code § 17054.1 (California Legislative Information, statute): Fixed $6 per $2,500 / $1,250. Quoted: "shall be reduced by six dollars ($6) for each two thousand five hundred dollars ($2,500)"; "one thousand two hundred fifty dollars ($1,250)". Checked 2026-09-30.
senior_hoh_credit_agi_limitIndexed: California CPI as modified for rental equivalent home ownership (all items), June-to-June; the increase rounded to the nearest $1. The engine carries the 2025 figure (the latest published) for 2026, so a projection adds 1 year of indexing at the factor's average annual rate.RTC 17054.7(b): the senior head-of-household credit's AGI limit ($37,500 base) is recomputed each year by the California CPI as modified for rental equivalent home ownership, rounded to the nearest $1 ($98,652 for 2025).
  • Cal. Rev. & Tax. Code § 17054.7 (California Legislative Information, statute): AGI limit recomputed annually by the rental-equivalent CPI, nearest $1. Quoted: "as modified for rental equivalent home ownership for all items from June of the prior calendar year to June of the current calendar year"; "and round off the resulting product to the nearest one dollar". Checked 2026-10-12.
  • 2025 California Form 540 Personal Income Tax Booklet (Franchise Tax Board, instructions): 2025 AGI limit. Quoted: "Did not have AGI over $98,652 for 2025.". Checked 2026-10-12.
senior_hoh_credit_capIndexed: follows the CPI-indexed AGI limit and standard deduction (California CPI, June to June); the increase rounded to the nearest $1. The engine carries the 2025 figure (the latest published) for 2026, so a projection adds 1 year of indexing at the factor's average annual rate.RTC 17054.7 sets no dollar cap: the credit is 2 percent of taxable income, and only a filer whose AGI is at or under the limit qualifies; that AGI limit is recomputed every year by the California CPI (subdivision (b), nearest $1), as is the standard deduction (RTC 17073.5). The FTB's published maximum ($1,860 for 2025) is 2 percent of the largest taxable income a qualifying AGI allows, so it moves with those two indexed amounts; the engine indexes it with them.
  • California Revenue and Taxation Code section 17054.7 (California Legislative Information, statute): The senior head of household credit is 2 percent of taxable income, with no dollar maximum in the statute; the FTB recomputes the AGI limit every year. Quoted: "an amount equal to 2 percent of the taxable income"; "shall recompute the adjusted gross income specified in paragraph (3) of subdivision (c)". Checked 2026-10-12.
top_surtax_thresholdFixed in law: held at the rules-year amount in every later year.RTC 17043: the 1% additional tax applies to taxable income over $1,000,000; the section expressly excludes the 17041 bracket recomputation, so the threshold is fixed for every filing status.
  • Cal. Rev. & Tax. Code § 17043 (California Legislative Information, statute): Fixed $1,000,000; no recomputation. Quoted: "in excess of one million dollars ($1,000,000)"; "relating to filing status and recomputation of the income tax brackets". Checked 2026-10-12.
military_cap, military_cap_mfjEnacted schedule: 2027: military_cap $20,000, military_cap_mfj $20,000; 2028: military_cap $20,000, military_cap_mfj $20,000; 2029: military_cap $20,000, military_cap_mfj $20,000; 2030: military_cap $0, military_cap_mfj $0; held at the 2030 value after 2030.RTC 17132.9 excludes up to $20,000 of military retirement pay for taxable years beginning on or after January 1, 2025 and before January 1, 2030 (no inflation adjustment); the section is repealed December 1, 2030. So $20,000 in 2027-2029 and $0 from 2030.
  • Cal. Rev. & Tax. Code § 17132.9 (California Legislative Information, statute): The 2025-2029 window and fixed $20,000. Quoted: "For taxable years beginning on or after January 1, 2025, and before January 1, 2030, gross income shall not include retirement pay"; "not to exceed twenty thousand dollars ($20,000)". Checked 2026-10-12.
military_income_limit_single, military_income_limit_mfjFixed in law: held at the rules-year amount in every later year.RTC 17132.9(b): the exclusion requires federal AGI not over $250,000 (joint/surviving spouse) or $125,000 (others); fixed amounts (the exclusion ends after 2029).
  • Cal. Rev. & Tax. Code § 17132.9 (California Legislative Information, statute): Fixed AGI limits. Quoted: "does not exceed two hundred fifty thousand dollars ($250,000)"; "does not exceed one hundred twenty-five thousand dollars ($125,000)". Checked 2026-10-12.
cap_loss_limit, cap_loss_limit_mfsFixed in law: held at the rules-year amount in every later year.The state follows the federal net capital loss limit of IRC 1211(b): $3,000 ($1,500 MFS), a fixed amount with no inflation adjustment.
  • 26 U.S.C. 1211 (limitation on capital losses) (Cornell LII (U.S. Code), federal): The capital-loss deduction against ordinary income is a fixed $3,000 ($1,500 MFS); section 1211 contains no inflation adjustment. Quoted: "$3,000 ($1,500 in the case of a married individual filing a separate return), or". Checked 2026-10-12.
blind_creditIndexed: California Consumer Price Index (all items), change from June of the prior year to June of the current year, applied to the preceding year's amounts; the increase rounded to the nearest $1. The engine carries the 2025 figure (the latest published) for 2026, so a projection adds 1 year of indexing at the factor's average annual rate.RTC 17054(i) recomputes the blind exemption credit with the other exemption credits (California CPI, nearest $1). The FTB's October 2026 indexing notice does not list it, so the engine carries the 2025 amount ($153) until the complete 2026 amounts publish in late December.
  • Cal. Rev. & Tax. Code § 17054 (California Legislative Information, statute): Annual recomputation of the credits, nearest $1. Quoted: "shall multiply the immediately preceding taxable year credits by the inflation adjustment factor determined in paragraph (2), and round off the resulting products to the nearest one dollar ($1).". Checked 2026-10-12.
  • Tax News, October 2026: 2026 Indexing (Internet Archive copy of the current edition) (California Franchise Tax Board, agency_page): The 2026 notice lists the personal, senior and dependent credits only; the rest follows in December. Quoted: "The complete 2026 tax rates and exemption amounts will be available on FTB's website in late December.". Checked 2026-10-12.
renter_credit, renter_credit_jointFixed in law: held at the rules-year amount in every later year.R&TC 17053.5: the renter's credit is $60 ($120 for joint, head of household and surviving-spouse returns); the amounts are statutory, only the AGI limits are recomputed each year.
  • 2025 Form 540 booklet (California Franchise Tax Board, instructions): The $60 / $120 amounts. Quoted: "Single, enter $60 on Form 540, line 46."; "Married/RDP filing jointly, enter $120 on Form 540, line 46.". Checked 2026-10-12.
renter_credit_agi, renter_credit_agi_jointIndexed: California Consumer Price Index (all items), change from June of the prior year to June of the current year, applied to the preceding year's amounts; the increase rounded to the nearest $1.R&TC 17053.5(c): the AGI limits are recomputed annually like the brackets (California CPI, nearest $1); the FTB's 2026 indexing gives $55,830 / $111,660.
ca-caleitc (a table held in code)Indexed: California Consumer Price Index (17041(h)); the increase rounded to the nearest $1. The engine carries the 2025 figure (the latest published) for 2026, so a projection adds 1 year of indexing at the factor's average annual rate.R&TC 17052: the CalEITC amounts are recomputed annually (17041(h)); the engine carries the 2025 table, the 2026 one not yet published.

Enacted for later years, not applied by the projection

None found: the research found no change enacted for years after 2026 beyond the schedules above.

What the engine does not calculate, and known approximations

What the engine does not calculate for any state (itemized deductions, credits beyond those listed, part-year residents, and more) is listed on the calculation order page.

Verification

Worksheet-tested backend/tests/test_state_worksheets_1.c replays the 2025 Form 540 (2026 indexing not yet published) line by line: Schedule CA subtractions (Social Security, the military exclusion and its federal-AGI cliff), the standard deduction, the line 7-9 exemption credits, the tax table by its midpoint method and Schedules X and Y, and the line 62 Behavioral Health Services Tax.