State guide
Does California tax retirement income? IRAs, Roth conversions and Social Security (2026)
By Secure Retirement PlannerUpdated
If you retire in California, the state does not tax your Social Security, but it taxes your pensions and IRA withdrawals as ordinary income. Your Roth conversion is taxed the same way, in the year you convert. For 2026, state rates run from 1% to 12.3%. Above $1 million of taxable income, a 1% Behavioral Health Services Tax is added, for a top rate of 13.3%.
The state has no special break for your IRA or pension income. So you will usually pay state tax on top of federal tax, and this page shows both. It does not tax your Social Security. If you plan to leave the state, a conversion after you become a nonresident is generally not California income.
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The short version
- California taxes your conversion like wages. You get no retirement income exclusion.
- If you're married, the 9.3% rate starts at $150,394 of California taxable income in 2026.
- California doesn't tax your Social Security, so it doesn't count toward your state taxable income.
- Once you are a nonresident, California does not tax your IRA distributions or conversions.
- California wants most of your estimated tax early: 30% in April, 40% in June, nothing in September.
Does California tax retirement income?
Partly. California leaves your Social Security alone. But it taxes your pensions, IRA and 401(k) withdrawals and Roth conversions like wages. Rates run from 1% to 12.3% for 2026, and there is no age-based break.
| Income type | Taxed by California in 2026? | Notes |
|---|---|---|
| Social Security | No | Tier 1 railroad retirement is not taxed either |
| Public pensions | Yes | Ordinary income, with no age-based break |
| Private pensions | Yes | Ordinary income, with no age-based break |
| IRA and 401(k) withdrawals | Yes | 1% to 12.3% for 2026. Early payouts can add a 2.5% state tax |
| Roth conversions | Yes | Taxed in the year you convert. Old 1982 to 1986 IRA contributions may be tax-free basis |
Does California tax a Roth conversion?
Yes. The state mostly follows the federal rules for IRAs. So the part of your conversion that is taxed on your federal return is taxed by the state too. It is added to your other income and taxed at the usual state rates.
The state has no age-based break for IRA or pension income. If you are 70 and convert $50,000, you pay state tax on it the same way you would at 50.
There is one California quirk. Did you put money in an IRA from 1982 to 1986? The FTB says your California basis can differ from your federal basis, because California's deduction limits were lower then. Money you couldn't deduct in California then is basis now. So part of your conversion could be tax-free in California. Check your old returns or ask a preparer.
What are California's 2026 tax rates for a couple?
These are the 2026 rates from the Franchise Tax Board (FTB) if you're married filing jointly. Your taxable income is your California income after the $11,800 standard deduction (or your itemized deductions).
| California taxable income over | But not over | Rate on this slice |
|---|---|---|
| $0 | $22,912 | 1% |
| $22,912 | $54,314 | 2% |
| $54,314 | $85,722 | 4% |
| $85,722 | $118,996 | 6% |
| $118,996 | $150,394 | 8% |
| $150,394 | $768,218 | 9.3% |
| $768,218 | $921,854 | 10.3% |
| $921,854 | $1,536,426 | 11.3% |
| $1,536,426 | and up | 12.3% |
Does California tax Social Security, and what else changes with a conversion?
The state leaves U.S. Social Security and Tier 1 railroad retirement benefits out of taxable income. A conversion can make more of your Social Security taxable on your federal return. But the state does not tax that extra amount.
For 2026, the FTB lists a $316 personal and senior exemption credit for joint filers. These credits phase out at high incomes. So a very large conversion can shrink yours.
If you are under 59½ and have tax withheld from your conversion, the withheld part is an early distribution. The state adds its own 2.5% tax on early payouts, on top of the federal 10% penalty. You avoid that by paying the tax from other savings.
If I'm leaving California, should I convert before or after I move?
In most cases, after. California's 2025 Schedule CA (540NR) instructions say IRA distributions a nonresident receives are not taxable. Federal law (4 U.S.C. 114) also bars states from taxing your IRA and 401(k) income once you've left.
If you convert while you still live there, it is fully California income. If you move in 2026, you file Form 540NR as a part-year resident. The state figures tax on all your income as if you had lived there all year. Then it applies that rate to your California income. So a conversion after the move can still raise the rate on income you earned before it.
California presumes you are a resident in any year you spend more than nine months in the state. It also looks at where your closest ties are. If you convert soon after leaving, keep proof your move was permanent. The Texas and Florida pages cover the other side: Texas and Florida.
When do I pay California estimated tax on a 2026 conversion?
The state's 2026 estimated tax schedule is uneven. If you owe estimated tax, 30% is due April 15, 2026, and 40% June 15, 2026. Nothing is due in September, and 30% is due January 15, 2027.
If you convert late in the year, the FTB lets you use the annualization method. It matches your payments to when you received the income. You can also have state tax withheld from an IRA distribution to cover it.
Is your 2026 California adjusted gross income $1,000,000 or more ($500,000 if married filing separately)? Then the FTB says you must base your estimates on your 2026 tax, not your 2025 tax.
Example: a San Diego couple converting $25,000 to $100,000
Rosa, 64, and Dan, 62, file jointly and haven't started Social Security. They expect $120,000 of other income in 2026 from Dan's pension and IRA withdrawals.
Before any conversion, their federal taxable income is $87,800. Their California taxable income is $108,200. A $50,000 conversion adds about $9,700 in federal tax and about $3,886 in California tax.
The state takes a bigger bite as the conversion grows. Past $150,394 of California taxable income, each extra dollar is taxed at 9.3%.
If you live in California, smaller conversions spread over several years may keep more of your money out of the higher state brackets. If you plan to move, the timing matters even more.
| Conversion | Added federal tax | Added California tax | Total added tax |
|---|---|---|---|
| $25,000 | about $4,200 | about $1,784 | about $5,984 |
| $50,000 | about $9,700 | about $3,886 | about $13,586 |
| $100,000 | about $20,700 | about $8,536 | about $29,236 |
Hypothetical example. Assumes married filing jointly, both under 65, no Social Security, $120,000 of other income, the 2026 federal standard deduction ($32,200) and the 2026 California standard deduction ($11,800). Uses the 2026 federal brackets (IRS Rev. Proc. 2025-32) and the FTB 2026 rate schedule. Exemption credits are the same before and after at these incomes. It ignores Medicare IRMAA and any California basis from old contributions. Your numbers will differ.
Common questions
Does California tax Roth conversions?
Yes. The amount you convert is California taxable income in the year you convert. Rates run from 1% to 12.3% in 2026, plus 1% on taxable income over $1 million.
Does California have a retirement income exclusion?
No. California does not exclude your IRA, 401(k) or private pension income by age. It does exclude your Social Security.
Are qualified Roth IRA withdrawals taxed in California later?
No. California follows the federal Roth rules, so your qualified withdrawals are tax-free in California too.
If I move out of California, can it tax my IRA later?
No, not on distributions or conversions after you become a nonresident. California's nonresident instructions say IRA distributions a nonresident receives are not taxable.
What is California's top rate on a conversion?
13.3%: the 12.3% top rate plus the 1% Behavioral Health Services Tax on taxable income over $1 million.
When is California estimated tax due for a 2026 conversion?
30% by April 15, 2026, 40% by June 15, 2026, and 30% by January 15, 2027. There is no September installment in California.
Sources
Facts on this page were last checked on November 9, 2026.
- California FTB, 2026 California Tax Rate Schedules · 2026 brackets and rates. Read Nov 9, 2026.
- California FTB, Tax News October 2026 (2026 indexing) · 2026 standard deduction ($11,800 joint) and exemption credits. Read Nov 9, 2026.
- California FTB, 2026 Instructions for Form 540-ES · Estimated tax dates and percentages, Behavioral Health Services Tax, $1 million AGI rule. Read Nov 9, 2026.
- California FTB, 2025 Instructions for Schedule CA (540NR) · IRA basis differences, Social Security exclusion, nonresident IRA distributions. Read Nov 9, 2026.
- California FTB Publication 1031 (2025), Guidelines for Determining Resident Status · Residency tests and part-year tax method. Read Nov 9, 2026.
- IRS Rev. Proc. 2025-32 (2026 inflation adjustments) · 2026 federal brackets and standard deduction. Read Nov 9, 2026.
Who wrote this
This guide was written and fact-checked by the Secure Retirement Planner editorial team using IRS, CMS and Social Security sources listed above. We update guides when the law or yearly limits change. How we research.