Does California Tax Retirement Income?

No. California does not tax Social Security benefits.

Social Security benefits are not taxed by California.

The California answer is separate from the federal one. Depending on combined income, up to 85% of Social Security benefits can be taxable on the federal return regardless of what California does, so the state rule changes the state line only. Our guide to states that do not tax Social Security shows where California sits among the states that still tax benefits.

Yes. California generally taxes pension income.

Private and government pension income is generally taxable to a California resident, with limited federal-law exceptions.

California does not offer a broad age-based retirement-income exclusion. A temporary military-retirement exclusion can cover up to $20,000 for qualifying taxpayers within the income limits.

Public and private pensions, annuities, and retirement-plan distributions do not always get the same treatment. The pension comparison lists which states exempt pensions broadly, partly, or only for certain plans.

Yes. California generally taxes traditional 401(k) and IRA withdrawals.

Traditional IRA and 401(k) distributions included in federal income are generally taxable by California.

Two timing points matter in California. A Roth conversion is taxable in the year it is done, and California starts from federal adjusted gross income, so a large conversion can land in a year when the state exclusion does not cover it. Qualified Roth withdrawals later are generally not taxable at either level. Required minimum distributions follow the same California rules as any other traditional-account withdrawal.

Every state page on this site runs the same retiree profile so the states can be compared: $30,000 of Social Security, $40,000 withdrawn from a traditional 401(k), and a $20,000 private pension, $90,000 in total.

A retiree with $30,000 of Social Security, $40,000 from a 401(k), and a $20,000 private pension excludes the Social Security but generally starts with $60,000 of California-taxable retirement income. The actual tax depends on total household taxable income and California brackets.

California starts from federal AGI of about $85,500 and removes the $25,500 of federally taxable Social Security, leaving $60,000 of 401(k) and pension income. Subtract the standard deduction, $5,706 for a single filer on the 2025 schedule, and about $54,300 is taxable. Run that through the 2025 single brackets (1% to $11,079, 2% to $26,264, 4% to $41,452, 6% above that) and the tax is roughly $1,800 before the personal and senior exemption credits, which bring it to roughly $1,500. Contrast: add a $150,000 lump-sum IRA withdrawal and taxable income is about $204,000, most of the new dollars fall in the 9.3% bracket, and the California tax rises to roughly $15,400, an increase of about $13,600 on the extra $150,000. The same withdrawal taken after a documented move out of California, with residency actually changed before the distribution date, would not be California-source income for a nonresident.

The same $90,000 profile looks different a state line away. The rows below come from the reviewed 51-state table; each state name links to its own guide.

• Nevada: has no individual income tax at all.
• Arizona: treats Social Security as exempt, pensions as partially taxed, and 401(k) and IRA withdrawals as taxed, with a top rate of 2.50% and up to $2,500 for qualifying government pensions.
• Texas: has no individual income tax at all.

California residency is often the bigger issue than the type of retirement account. A distribution after a genuine move may escape California resident tax, while a paper move that leaves the facts unchanged may not.

Military retirement: For tax years 2025 through 2029, qualifying taxpayers may exclude up to $20,000 of military retirement pay, subject to adjusted-gross-income limits. See the military retirement tax map for every state's treatment.

Estate and inheritance tax: California has no separate estate or inheritance tax.

Selling a home or investments in California: retirement-income rules do not cover capital gains. See California capital gains tax before selling appreciated property or a brokerage position in the year you move or retire.

• Confirm the exclusion you are claiming. California does not offer a broad age-based retirement-income exclusion. A temporary military-retirement exclusion can cover up to $20,000 for qualifying taxpayers within the income limits.
• Part-year residents. If you moved into or out of California during the year, retirement income is generally allocated to the period of residency, and the former state may still tax distributions received before the move. Document the move date, the new domicile, and where each distribution was received.
• Withholding and estimates. Pension and IRA custodians often withhold federal tax but not California tax. If California taxes any part of your retirement income, check whether quarterly estimated payments are needed to avoid an underpayment penalty.
• Federal side. The federal return has its own rules: up to 85% of Social Security can be taxable, the temporary $6,000 federal senior deduction is available for 2025 through 2028 subject to income limits, and Roth conversions are taxed in the conversion year. State exemptions do not change any of that.
• Large one-time distributions. For a planned move, coordinate domicile evidence, distribution timing, and any California-source income. Moving one day before a large withdrawal does not by itself settle residency.

Comparing states before a move? Use the retirement taxes by state table and the moving states tax guide, and read retirement tax planning for how distributions, conversions, and a move are sequenced together.