Who Must File a California Income Tax Return?

You must file a California income tax return if your gross income or adjusted gross income for the year exceeds the Franchise Tax Board’s threshold for your filing status, age, and number of dependents, or if a situation such as a gap in health coverage, self-employment income, California Alternative Minimum Tax, or California-source income as a nonresident applies. For a single filer under 65 with no dependents in 2025, the trigger is $22,941 in gross income or $18,353 in AGI; cross either number and a return is required.

Income Thresholds for 2025

The FTB sets two thresholds for every filing situation: one based on gross income, one based on adjusted gross income. You only have to exceed one of them to be required to file.¹

Single and Head of Household

If you are under 65 and no one claims you as a dependent, you must file at $22,941 gross income or $18,353 AGI. One dependent raises those numbers to $38,774 and $34,186. Two or more dependents raise them to $50,649 and $46,061.¹

At 65 or older with no dependents, you file at $30,591 gross or $26,003 AGI. One dependent: $42,466 or $37,878. Two or more: $51,966 or $47,378.¹

Married Couples and Registered Domestic Partners

California combines both spouses’ income for this test, even if only one spouse earned anything. When both spouses are under 65 and have no dependents, the thresholds are $45,887 gross or $36,711 AGI. One dependent: $61,720 or $52,544. Two or more: $73,595 or $64,419.¹

With one spouse 65 or older and no dependents, the thresholds rise to $53,537 gross or $44,361 AGI. With both spouses 65 or older and no dependents, they are $61,187 gross or $52,011 AGI. Dependents push each figure higher.¹

Dependents With Their Own Income

If someone else claims you as a dependent, your standard deduction is reduced to the larger of $1,300 or your earned income plus $450. That lower deduction means you can hit a filing requirement on a smaller amount of earned or unearned income than other filers. Dependents with significant investment income especially need to check.²

Residency Changes Which Income Counts

Before comparing yourself to the thresholds, figure out which of your income California can tax. That depends on where you lived.

If you were a California resident the whole year, every dollar you earned anywhere in the world counts, including wages from out-of-state employers, investment gains, and rental income from property in other states.³

If you never lived in California during the year, only your California-source income counts. That includes wages for work physically performed in the state, rental income from California property, income from a California-based business, gains from selling California real estate, and your share of partnership or S corporation income from California operations. If that income exceeds the thresholds for your situation, you file Form 540NR.⁴

If you moved into or out of California during the year, California taxes all income you received while you lived here, plus any California-source income you received during the months you lived elsewhere. Part-year residents also use Form 540NR.³

California does not have reciprocity agreements with other states. Living in a neighboring state and commuting to a California job generally means a California nonresident return for the California wages, with a credit claimed on your home state’s return.

Situations That Require a Return Regardless of Income

A Gap in Health Coverage

This is the one that surprises people. California requires nearly all residents to maintain qualifying health coverage. If you went without coverage for any month and don’t qualify for an exemption, you owe a penalty that is reported on your return using Form 3853, even if your income otherwise wouldn’t require you to file.⁵

The 2025 penalty is the higher of two calculations. Flat-dollar: $950 per uninsured adult plus $475 per uninsured child under 18. Percentage: 2.5% of your gross income above the state filing threshold for your status. The FTB applies whichever is larger.⁵ If you had coverage all year, you check a box on Form 540 and move on.⁶

Self-Employment Income

Self-employed Californians must report all business income and losses on Form 540 regardless of whether net earnings fall below the standard thresholds. The rule applies to residents on all self-employment income and to nonresidents on California-source self-employment income.⁷

California Alternative Minimum Tax

California has its own AMT, separate from the federal version. Certain deductions and types of income can push your alternative minimum taxable income high enough to owe it. If you do, Schedule P (540) is required with your return.⁸

Military Spouses Stationed in California

Under the federal Military Spouses Residency Relief Act, the nonmilitary spouse of an active-duty servicemember does not owe California income tax on wages earned in California if the spouse is here solely because the servicemember is stationed here on orders and the spouse maintains a legal domicile in another state. Those wages are taxed only by the home state, and if that is the spouse’s only California income, no California return is required.⁹

Other California-source income, such as rent from California property, remains taxable. And if California tax was mistakenly withheld from an exempt spouse’s paycheck, filing a nonresident return is the only way to get a refund.⁹

Reasons to File Even When You Don’t Have To

If your employer withheld California income tax from your paychecks, filing a return is the only way to get that money back. People below the thresholds who skip filing often forfeit refunds they were owed.

Filing is also the only way to claim California’s refundable credits. The California Earned Income Tax Credit (CalEITC) pays up to $3,756 for the 2025 tax year to working individuals and families with earned income of $32,900 or less.¹⁰ The Young Child Tax Credit adds up to $1,189 if you qualify for CalEITC and have a child under six.¹¹ The Foster Youth Tax Credit provides up to $1,189 for current and former foster youth ages 18 to 25 who qualify for CalEITC and were placed through the California foster care system at age 13 or older.¹²

Because these credits are refundable, they can pay out even when you owed no California tax at all.

What Happens if You Were Required to File and Didn’t

The FTB charges a delinquent filing penalty of 5% of the unpaid tax for each month or partial month your return is late, capped at 25%. If your balance due is $540 or less, the minimum penalty is the lesser of $135 or 100% of the tax owed. If the return is more than 60 days late, the minimum penalty is $135 regardless of how small the balance is.¹³

A separate late-payment penalty of 5% applies if you filed on time but didn’t pay, plus 0.5% per month on the outstanding balance, up to 25%.¹⁴ Interest accrues on top of both. The FTB’s rate from July 2025 through June 2026 is 7% annually.¹⁵

1
Franchise Tax Board. 2025 Personal Income Tax Booklet
2
Franchise Tax Board. Residents
3
Franchise Tax Board. Part-Year Resident and Nonresident
4
Franchise Tax Board. Taxation of Nonresidents and Individuals Who Change Residency
5
Franchise Tax Board. Personal Health Care Mandate
6
Franchise Tax Board. 2024 Instructions for Form FTB 3853
7
Franchise Tax Board. Self-Employed
8
Franchise Tax Board. 2024 Instructions for Schedule P (540) Alternative Minimum Tax and Credit Limitations – Residents
9
Franchise Tax Board. 2025 FTB Publication 1032 Tax Information for Military Personnel
10
Franchise Tax Board. California Earned Income Tax Credit
11
Franchise Tax Board. Young Child Tax Credit
12
Franchise Tax Board. Foster Youth Tax Credit
13
Franchise Tax Board. Common Penalties and Fees
14
Franchise Tax Board. FTB 1024 Penalty Reference Chart
15
Franchise Tax Board. Interest and Estimate Penalty Rates