Updated September 4, 2026. Quick answer: Yes, in almost all cases. California conforms to federal treatment, so public, private and federal pensions and IRA/401(k) distributions are all fully taxable, the same as ordinary income. The one new exception: starting tax year 2025, up to $20,000 of military retirement pay is exempt for filers under an income cap, through 2029.
California Form 540, line by line: California Form 540 line 9, California Form 540 line 13 and California Form 540 line 14.
More on public pension systems, topic by topic: LACERS service credit purchases, LACERS disability retirement and LACERS retirement payment options.
More state retirement-income schedules, line by line: California Schedule CA (540) pension lines.
Read box by box from the IRS form text: Form 1099-R boxes 14 to 19.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: California tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does California tax 403(b) and 457(b) withdrawals.
More IRS forms and schedules, read line by line: Form W-4P instructions.
Drawing a pension? Whether the state withholds tax from it, from its own documents: California tax withholding on pension payments.
Married, or planning for a spouse’s death? Whether the state is a community property state, from its own statutes: Is California a community property state?.
The Los Angeles Fire and Police Pensions options, DROP and survivor rules, from the system’s own documents: LAFPP retirement decisions.
Five more California county retirement systems, with refund and survivor rules from each system’s own documents: Tulare County TCERA retirement decisions, StanCERA retirement decisions, SJCERA retirement decisions, SBCERS retirement decisions and Imperial County retirement decisions.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: California tax withholding on IRA and 401(k) withdrawals.
A pension earned in another state, or paid after a move, is covered here: does California tax out-of-state pensions.
The Sonoma County SCERA payment options and refund rules, from its own pages: Sonoma County SCERA retirement decisions.
San Francisco SFERS, Ventura County VCERA and Kern County KCERA payment options and refund rules, from their own documents: San Francisco SFERS retirement decisions, VCERA retirement decisions and KCERA retirement decisions.
Sacramento, Contra Costa, Fresno and San Mateo county pension payment options and refund rules, from their own documents: Sacramento SCERS retirement decisions, CCCERA retirement decisions, FCERA retirement decisions and SamCERA retirement decisions.
The SBCERA and ACERA county pension payment options and refund rules, from their own documents: SBCERA retirement decisions and ACERA retirement decisions.
The San Diego City and County pension systems’ payment options and refund rules, from their own pages: SDCERS retirement decisions and SDCERA retirement decisions.
Trusts have their own page: does California tax trust income.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does California have an inheritance tax?.
Dividends and interest have their own page: does California tax dividends and interest.
Contributing to an HSA? How the state taxes it, from its own tax documents: Does California tax HSA contributions?.
Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does California have a gift tax?.
Annuity payments have their own page: does California tax annuity income.
Planning for what you leave behind? The state’s estate tax answer, from its own tax documents: Does California have an estate tax?.
Estimate a CalSTRS benefit from age, service credit and final compensation: CalSTRS retirement calculator.
Military retired pay has its own page: does California tax military retirement.
Saving for a child’s college? The state’s 529 break has its own page: California 529 plan tax deduction.
Selling stocks, funds or real estate has its own page: does California tax capital gains.
Withdrawals from a 401(k) or IRA have their own page: does California tax 401(k) and IRA withdrawals.
Put your own numbers through the CalPERS formula: CalPERS retirement calculator.
The state’s income tax schedule: the California 2026 tax brackets (pending).
The OCERS and LACERS payment options and refund rules, from each system’s own documents: OCERS retirement decisions and LACERS retirement decisions.
The UCRP payment options and lump sum cashout, from the plan’s own documents: UCRP retirement decisions.
The LACERA payment options, survivor allowance and withdrawal rules: LACERA retirement decisions.
Related guides on this topic: The Annual Funding Notice.
Related state retirement tax guides: Leaving California in Retirement and California to Mississippi Retirement Taxes.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how California taxes retirement income generally.
The rule in the source’s own words. California Revenue and Taxation Code section 17132.9: “gross income shall not include retirement pay received by a qualified taxpayer during the taxable year, not to exceed twenty thousand dollars ($20,000)” (source, read October 5, 2026). This page’s governing citation: Cal. Rev. & Tax. Code sec. 17081 (general conformity), sec. 17054 (senior credit), secs. 17132.9 to 17132.10 (2025 military exclusion).
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Fully taxable. California conforms to the federal treatment of pensions with no state-specific exemption. |
|---|---|
| Private (employer) pensions | Fully taxable, identical treatment to public pensions. |
| Federal government pensions (FERS/CSRS) | Fully taxable, following the same federal-conformity rule; not listed among the state’s specific differences from federal treatment. |
| Military retirement pay | New for tax year 2025: up to $20,000 of uniformed-services retirement pay or DoD Survivor Benefit Plan annuities is exempt, subject to an AGI cap of $125,000 (single) or $250,000 (joint), effective through 2029. Before this, military retirement pay was fully taxable like any other pension. |
| IRA and 401(k)/403(b) distributions | Fully taxable, following federal rules, with California-specific basis adjustments carried over from old nondeductible contributions. |
| General retirement-income exclusion | A nonrefundable Senior Exemption Credit of $153 per qualifying spouse or registered domestic partner age 65+ for 2025 (inflation-adjusted from a $52 statutory base) offsets tax generally, not specifically retirement income. |
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How our partner relationships workSocial Security
Social Security is never taxed by California. Social Security has its own rules in every state; see the full breakdown in how California taxes retirement income generally.
Figures verified against FTB Publication 1005 (2025), the 2025 Form 540 booklet, and Cal. Rev. & Tax. Code secs. 17132.9 and 17054 on September 30, 2026.
Statute and sources
Governing citation: Cal. Rev. & Tax. Code sec. 17081 (general conformity), sec. 17054 (senior credit), secs. 17132.9 to 17132.10 (2025 military exclusion).
- California FTB Publication 1005 (2025)
- Cal. Rev. & Tax. Code sec. 17132.9
- California FTB 2025 Form 540 Booklet
Read September 4, 2026.
Related: how California taxes retirement income generally · does California tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.