California state income tax for newcomers: residency and forms

Step 1 — Find out if California counts you as a resident

You’re a California resident if either of these is true (FTB — Residents):

• you are in California for other than a temporary or transitory purpose;
• California is your domicile, but you are outside the state for a temporary or transitory purpose.

The FTB says your residence is generally the place where you have your closest connections, and that the strength of your ties matters, not just their number (FTB — Publication 1031). Coming to California for a vacation, to complete a transaction or just passing through is temporary. A long or indefinite job assignment is not (FTB — Publication 1031). You are also presumed to be a resident for any tax year in which you spend more than nine months in the state (FTB — Publication 1031).

The FTB’s list of factors includes:

• how much time you spend in California compared with elsewhere;
• where your spouse or registered domestic partner (RDP) and children live;
• where your main home is;
• which state issued your driver’s license, and where your vehicles are registered;
• where you are registered to vote;
• where your banks and your doctors are.

It calls this a partial list, and says no single factor decides (FTB — Publication 1031).

Why it matters:

• Residents are taxed on all income, whatever its source (FTB — Residents).
• Part-year residents pay tax on all worldwide income received while they were residents, plus California-source income received while they were not (FTB — Part-year and nonresident).
• Nonresidents pay tax only on California-source income, such as services performed in California or rent from California property (FTB — Part-year and nonresident).

These are state rules. They are separate from the federal tests in our tax residency guide. This guide doesn’t give legal advice; if you’re unsure where you stand, read the FTB publication or ask the FTB.

Step 2 — Give your employer the California form (DE 4)

When you start a job you fill out the federal Form W-4. In California that isn’t enough. The state’s Employment Development Department (EDD) says the W-4 is used for federal income tax withholding only, and that you must file the state form DE 4 for California withholding. If you don’t give your employer a completed DE 4, the employer must withhold as if you were single with zero allowances (EDD — DE 4).

Two California amounts come out of your pay, according to the EDD (EDD — State payroll taxes):

• Personal income tax: withheld based on your DE 4. There is no taxable wage limit.
• State Disability Insurance (SDI): a deduction from your wages that pays for short-term disability benefits and Paid Family Leave. The EDD publishes the current rate each year.

The other two state payroll taxes, for unemployment insurance and job training, are paid by employers (EDD — State payroll taxes). More on your pay stub: paycheck and withholding.

Step 3 — Check whether you need to file

The FTB says that, as a resident, part-year resident or nonresident, you generally must file a California return if one of these applies (FTB — Do you need to file?):

• you must file a federal return;
• you receive income from a California source;
• your income is above a certain amount.

That amount depends on your filing status, your age and your number of dependents. The FTB publishes the tables for each tax year on its Residents page, so check the current year there instead of relying on a number in a guide.

You may want to file even if you don’t have to. The FTB says that if money was withheld from your paycheck for state taxes, you may be able to get a refund (FTB — Do you need to file?). You may also be able to claim state credits, including three refundable ones: the California Earned Income Tax Credit, the Young Child Tax Credit and the Foster Youth Tax Credit. A refundable credit can give you a cash refund even if you owe no tax (FTB — ITIN). For the CalEITC, the FTB says you may generally claim it for up to four prior years by filing or amending your return (FTB — CalEITC).

No SSN? Californians without an SSN can use an ITIN to file a state return, to get back over-withheld pay or to claim state credits (FTB — ITIN). The FTB also says a taxpayer can file a California return without an ITIN or SSN (FTB — ITIN). See our guides to getting an ITIN and getting a Social Security number.

No W-2? Ask your employer first. If you can’t get a copy, the FTB says to use form FTB 3525 to report your wages (FTB — Wages).

Step 4 — Pick the right form

• Full-year residents with a filing requirement file either Form 540 2EZ or Form 540 (FTB — Residents). The 2EZ is a shorter form for simple returns, such as wages, interest, pensions and Social Security with only the standard deduction and income below set limits. Otherwise you use Form 540 (FTB — Residents).
• Nonresidents and part-year residents file Form 540NR. California uses its own method to compute their tax (FTB — Part-year and nonresident).
• Married or in a registered domestic partnership? A nonresident return is required when a resident spouse and a nonresident spouse want to file jointly. California is also a community property state, so the resident spouse may have to report income earned outside California (FTB — Part-year and nonresident).
• Filing status should generally match your federal return (FTB — Filing status).

Step 5 — Know the deadlines

For tax year 2025, the FTB’s due-dates page gives April 15, 2026 as the date to file and to pay any balance due (FTB — Due dates). California then gives an automatic extension to file until October 15, 2026, and you don’t have to apply (FTB — Extension to file).

An extension to file is not an extension to pay. The FTB says you still need to pay what you owe by April 15 to avoid penalties and interest (FTB — Extension to file). Check the same page for the dates for the year you’re filing. It also lists the quarterly dates for estimated tax payments, made with Form 540-ES (FTB — Due dates).

Step 6 — File your return

• CalFile lets you e-file your state return directly with the FTB, for free (FTB — CalFile). You need a MyFTB account, and to register you must have filed a California return for one of the last five years (FTB — CalFile). For tax year 2025, CalFile was only for people who were California residents for the entire year (FTB — CalFile qualifications). So if this is your first California return, or you moved in during the year, you may need another option.
• Other free e-file options. The FTB’s e-file page lists other free options besides CalFile, and separately lists providers that may charge a fee (FTB — File online).
• Free help. If you have a limited income or are over 60, you may get free help e-filing through the volunteer programs VITA and TCE (FTB — File online).
• Paper. You can mail your return. The FTB says that may take up to three months to process (FTB — Ways to file).

Step 7 — If you move away or work remotely for a California employer

The FTB gives these examples (FTB — Part-year and nonresident):

• You leave California but keep working remotely for a California employer and sometimes travel back to work in the state. You need a California return, on Form 540NR, for the part of your pay that is California-sourced. One way to figure it out is to multiply your income by your California workdays divided by your total workdays.
• You do all your work outside California after you move. You may not owe California tax on that pay, with exceptions such as deferred or equity-based compensation.
• You move temporarily for a job but plan to return. You may still be a California resident.
• You’re an independent contractor. Your California-source income depends on where your customer receives the benefit of your service, not where you do the work.

Taxed by two states? The FTB’s Other State Tax Credit offsets what you paid to another state on income that California also taxes, so you don’t pay twice. You claim it with Schedule S on your California return, and you don’t qualify if the other state gives you a credit (FTB — Other state tax credit).