Working in 2 different states: does the California income tax rate only consider the money earned in California, or anywhere?

Asked by: Ursula Delgado

Is income earned in another state taxable in California?

Yes, California taxes income earned from ALL state sources.

According to, California residents are “taxed on ALL income, including income from sources outside California.”

What is considered California-source income?

Sourced income includes, but is not limited to: Services performed in California. Rent from real property located in California. The sale or transfer of real California property.

Do you pay California taxes if you work in a different state?

While working in California you will ordinarily be subject to the withholding and payroll taxes facing any resident employed in California. You’ll file a nonresident California tax return in April of the next year (a Form 540NR), or October if you file for an extension.

Can I be taxed on the same income in two states?

Federal law prevents two states from being able to tax the same income. If the states do not have reciprocity, then you’ll typically get a credit for the taxes withheld by your work state.

Who must pay California state income tax?

The state of California requires you to pay taxes if you are a resident or nonresident that receives income from a California source. The state income tax rates range from 1% to 12.3%, and the sales tax rate is 7.25% to 10.75%.