If you earned some form of income in the Golden State, criteria such as your residency status, income and federal filing obligation will all determine whether you have to submit a personal income tax return. Thanks to the state tax board's streamlined website, you can easily file your tax return for free and pay your taxes without needing to turn to a third-party service. You can also calculate your potential tax liability to prepare for tax season and monitor your refund status after you file.
Who Must File California Income Taxes?
If you're a California resident or nonresident and you filed a federal income tax return and made some taxable income in California, you may have to file. Your income in such cases could come from a California employer, property sales or rental proceeds or self-employment.
From there, your state tax filing requirement comes down to your filing status, age, income and number of dependents for the tax year. For example, if you're under 65 and you have no dependents, you'd need to file with a California adjusted gross income of $14,797 if filing single or $29,599 if filing jointly. With a dependent, the thresholds go up to $27,654 if filing single and $42,366 if filing jointly.
Even if you have no obligation to file a California return, it might financially benefit you to do so. For example, the California Franchise Tax Board mentions such filers could still get a refund due to the California Earned Income Tax Credit or excess employer withholdings.
What Are the Forms to Use?
If you're a full-year resident of California, you'll end up using either the 540 or 540 2EZ tax return form.
Form 540 is the standard version that works for all individual taxpayers and allows you to take advantage of the many credits and deductions available. On the other hand, Form 540 2EZ is for simpler returns since you can't itemize, claim self-employment income or use income adjustments and certain state credits. Also, you need to have an income under $100,000 (if single) or $200,000 (if married filing jointly) and no more than three dependents for which you'll get an exemption.
As a nonresident or part-year resident, you'd use the 540NR tax form that's similar to the 540 for residents. However, your return would include extra steps to calculate your tax liability given your income from California.
What Is the Tax Rate in California?
For the 2021 tax year, California has nine income tax rates. They are progressive rates and depend on your filing status and income.
- 1 percent: up to $9,325 (filing single) or $18,650 (married filing jointly)
- 2 percent: $9,325 to $22,107 (filing single) or $18,650 to $44,214 (married filing jointly)
- 4 percent: $22,107 to $34,892 (filing single) or $44,214 to $69,784 (married filing jointly)
- 6 percent: $34,892 to $48,435 (filing single) or $69,784 to $96,870 (married filing jointly)
- 8 percent: $48,435 to $61,214 (filing single) or $96,870 to $122,428 (married filing jointly)
- 9.3 percent: $61,214 to $312,686 (filing single) or $122,428 to $625,372 (married filing jointly)
- 10.3 percent: $312,686 to $375,221 (filing single) or $625,372 to $750,442 (married filing jointly)
- 11.3 percent: $375,221 to $625,369 (filing single) or $750,442 to $1,250,738 (married filing jointly)
- 12.3 percent: more than $625,369 (filing single) or more than $1,250,738 (married filing jointly)
What Are the Filing Deadline and Extension Process?
While it usually falls on April 15, the California tax filing deadline in 2022 will fall later on April 18. This is in line with the IRS federal filing deadline where a holiday or weekend will move the usual tax day to the next business day. This same date is when you need to have paid your California tax liability or else penalties and interest begin to apply.
If you'll miss the filing deadline for your California state tax return, the good news is you can get a six-month extension automatically. You'll just need to submit your tax payment to the California Franchise Tax Board by April 18, 2022.
The state lets individuals request a payment plan to have up to five years to pay the taxes. Doing so comes with a $34 fee, but you can get manageable tax payments and avoid further issues such as ending up with a collections account on your credit report.
What Are the Penalties for Late Filing and Underpayment of Taxes?
California taxpayers can end up with a penalty for delinquent filing when they both miss the extended tax filing deadline and fail to pay the taxes in full before the due date. The penalty will depend on the tax amount due. For example, if it's no more than $540, you'll pay the smaller of your whole tax amount or $135. If you owe more than that, it's a 5 percent penalty each month, up to 25 percent of the taxes owed.
If you file your income tax return time but don't pay your California taxes in full when they're due, you will have to pay two penalties. First, you'll pay 5 percent of the taxes owed. Second, the state can charge you 0.5 percent of the tax balance every month for up to 40 months.
Where Do I Mail/E-file My California Return?
You can conveniently e-file your California state income tax return for free using the CalFile service the California Franchise Tax Board website offers. You can simply set up an account on the government website, go through the filing steps and arrange for a quicker refund through direct deposit. If you'd rather not use this service, you can use tax preparation and filing services like TurboTax and TaxAct or have a tax professional handle it for you.
In addition, you can choose to fill out your California tax forms and mail them. The Franchise Tax Board mailing address to use depends on the inclusion of a tax payment as follows:
- Sending with payment: P.O. Box 942867, Sacramento, CA 94267-0001
- Sending without payment: P.O. Box 942840, Sacramento, CA 94240-0001
How Do I Pay Taxes Due?
You can easily pay your California taxes immediately if you file using CalFile. You can also do so later from your bank account using the free WebPay service on ftb.ca.gov. If you need to use a credit card, you can send your tax payment through ACI Payments and incur a service fee of 2.3 percent with this option. You can also pay California taxes when completing the filing process with third-party tax preparation software.
The California Franchise Tax Board accepts payments in person if you visit your local field office. Alternatively, you can fill out a payment voucher and send a money order or check to the Franchise Tax Board at the following address: P.O. Box 942867, Sacramento, CA 94267-0001
Where Can I Check My California Refund Status?
Tax refunds in California usually come within three weeks when you e-file and three months when you mail a paper return. Direct deposits arrive faster than checks, while issues with your return can extend the refund processing process.
California's "Where's My Refund?" tool lets taxpayers easily follow your refund's progress. You'll enter your Social Security number, amount of refund, ZIP code and the numerical part of your street address. The state also lets you dial 1-800-338-0505 and go through the steps to select the tax refund status option and verify yourself.
What About California Taxes if You’re Self-employed?
California's tax laws have self-employed taxpayers who are sole proprietors simply use Form 540 or 540NR like other taxpayers. In addition, the usual individual income tax rates apply. To avoid an underpayment penalty, be sure to pay your estimated California taxes each quarter.
What About California Taxes if You’re a Business?
Having a business such as a partnership or corporation leads to filing different tax forms, depending on your classification. Different tax rates will apply to these businesses than for individuals, and businesses make estimated payments every quarter. You can learn more about California business filing here.
Rates and dates in this article are correct as of publication. But check for any changes with the California Department of Tax and Fee Administration before you file.
- State of California Franchise Tax Board: Where’s My Refund?
- State of California Franchise Tax Board: Mailing Addresses
- California State of California Franchise Tax Board: Due Dates
- State of California Franchise Tax Board: Payment Plans
- State of California Franchise Tax Board: Common Penalties and Fees
- State of California Franchise Tax Board: CalFile
- State of California Franchise Tax Board: Payment Options
- State of California Franchise Tax Board: Check, Money Order, Cashier’s Check
- State of California Franchise Tax Board: Tax Calculator, Tables, Rates
- State of California Franchise Tax Board: Part-year Resident and Nonresident
- State of California Franchise Tax Board: Residents
- State of California Franchise Tax Board: Do You Need to File?
- State of California Franchise Tax Board: Forms and Publications
- State of California Franchise Tax Board: Sole Proprietorship
- State of California: Business
Ashley Donohoe has written about business and technology topics since 2010. Having a Master of Business Administration degree, bookkeeping certification and experience running a small business and doing tax returns, she is knowledgeable about the tax issues individuals and businesses face. Other places featuring her business writing include Zacks, JobHero, LoveToKnow, Bizfluent, Chron and Study.com.