CA
Static Conformity — Needs Legislation
13.3%
Top state income tax rate
high
SALT deduction impact
OBBBA in California: What You Need to Know
California is the most impactful state for OBBBA non-conformity. CA uses static conformity and historically decouples from TCJA. Tips and overtime likely still taxed at state level (up to 13.3%). However, the SALT increase is purely federal — CA residents with high property/income taxes benefit significantly on federal returns.
OBBBA Provision Impact for California Residents
| OBBBA Provision | Federal Impact | CA State Impact |
|---|---|---|
| Tip Income Exemption ($25k) | ✅ Exempt from federal income tax | ⚠️ Still taxed at 13.3% until state acts |
| Overtime Exemption | ✅ All OT exempt from federal tax | ⚠️ Still taxed at state level |
| SALT Cap ($40k married) | ✅ Deduct up to $40k on federal return | 🔴 High benefit — high state/property taxes |
| Child Tax Credit ($2,500) | ✅ Federal CTC expanded | No direct state effect |
| Senior Deduction ($4,000) | ✅ Additional $4k deduction | ⚠️ Likely not adopted |
| Trump Accounts | ✅ $1,000 federal seed + tax-free growth | Federal program — state tax treatment varies |
Calculate Your California Tax Savings
Enter your income, tips, overtime, and family details to see your federal OBBBA savings.
Use the OBBBA Calculator →