Updated October 16, 2026. Quick answer: Yes, unless you opt out. California personal income tax is withheld from a resident’s pension and annuity payments like wages, and you can elect none on Form DE 4P.
More on public pension systems, topic by topic: UCRP service credit purchase and UCRP disability income.
California pension withholding at a glance
| Item | What the documents say |
|---|---|
| Is state withholding required on regular pension payments? | Yes, unless you elect not to have it withheld on Form DE 4P |
| Default rate if you give the payer no form | With no form on file the payer uses the state schedules as a married payee with three allowances, or 10 percent of the federal withholding amount (the payer chooses) |
| Lump sum or one-time payment | The same DE 4P covers lump sums; the election on a nonperiodic payment is made payment by payment unless the payer makes it permanent |
| Form to start, change or stop it | Form DE 4P (Rev. 46 (1-26)), a federal W-4P, or the payer’s substitute |
| Changed for 2026? | The DE 4P was revised for 2026 and its worksheet uses the 2026 tax rate schedules; the rule itself is not described as changed |
What the California documents say
California’s Employment Development Department says state law requires that California personal income tax be withheld from pension and annuity payments, treated like wages, unless the payee elects otherwise.
If you give the payer no DE 4P or federal W-4P, the payer must use one of two defaults. The information sheet says withholding is figured by “treating the payee as a married individual claiming three allowances”, or the payer may use “Withholding 10 percent of the amount of federal withholding”.
On Form DE 4P, line 1 elects no withholding, line 2 sets allowances, line 3 adds a dollar amount and line 4 sets a flat dollar amount. To revoke an exemption you file another DE 4P completing line 2, 3 or 4, and the change takes effect about 30 days after filing. For a nonperiodic payment the information sheet says you “may make or revoke an election at any time before the distribution”.
What a mover should know
This page is about California as a state of residence. An instruction line written for a nonresident or part-year filer is not the rule for a resident, and none of the documents read settles a part-year or two-state case, so check each state’s own rule. The federal side is the same everywhere; CMG’s federal 20% withholding on a pension lump sum page covers it, state tax withholding on IRA and 401(k) withdrawals in California covers the account side, and state withholding on retirement withdrawals lists the other states checked.
What the documents do not say
- The information sheet (DE 231P) read is the 2019 revision. The documents read do not say how a direct rollover is treated for California withholding.
Common mistakes
- Giving the payer a federal W-4P and assuming it also settles the state; check whether the state’s own form is needed.
- Assuming the answer for one state applies to another, or that state withholding settles the state tax owed at filing.
Related: state tax withholding on IRA and 401(k) withdrawals in California, California retirement taxes, whether California taxes pensions, state withholding on retirement withdrawals, and retirement withholding calculator.
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Answer againSources
- Withholding From Pensions, Annuities, and Certain Other Deferred Income (DE 231P Rev. 9 (9-19)): https://edd.ca.gov/siteassets/files/pdf_pub_ctr/de231p.pdf
- IRS Tax Topic 413, Rollovers from retirement plans: https://www.irs.gov/taxtopics/tc413
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.