How is crypto taxed in California?

Crypto tax in California works through the state's regular income tax. The IRS treats digital assets as property, so selling, swapping or spending crypto can create a capital gain or loss. California then taxes that gain as ordinary income. The federal side is covered in how crypto is taxed in the US. How California compares with other states is in do states tax crypto.

What is the California crypto tax rate?

There is no crypto-specific rate. Crypto gains are added to your other income and taxed under the normal brackets. Under the Franchise Tax Board's 2025 rate schedules, a single filer pays 1% on the first $11,079 of taxable income. The top rate of 12.3% starts above $742,953. For married couples filing jointly, the 12.3% bracket starts above $1,010,417.

On top of that, the 2025 Form 540 instructions say that taxable income over $1,000,000 owes a 1% Behavioral Health Services Tax on the amount above $1 million. A very large crypto gain can push part of your income into that range. Brackets change each year, so these figures are as of tax year 2025.

Does California tax crypto differently from the IRS?

The main difference is the rate. The FTB states that California has no lower rate for capital gains and taxes all of them as ordinary income. At the federal level, assets held for more than a year usually get lower long-term rates. In California, a coin held for five years is taxed at the same state rate as one held for five days.

You still report gains on your federal Form 1040 and Schedule D. If your federal and California figures differ, the FTB asks you to file California Schedule D (540). The 2025 California return was due on 15 April 2026. Crypto received as income, such as pay, is treated as ordinary income at the federal level too, as the IRS explains.

Does California tax crypto if you move out of the state?

It depends on when you sell. FTB Publication 1031 says residents are taxed on income from all sources. Nonresidents are taxed only on California-source income. Part-year residents are taxed on everything earned while resident and only California-source income after that.

For stocks and bonds, the FTB says a gain is sourced to where you live at the time of sale. The publication does not mention crypto specifically. You are presumed to be a California resident in any year you spend more than nine months in the state. Records matter here, so see how to download your crypto transaction history.

California also licenses crypto businesses separately from taxing users, as explained in state crypto licenses.

Rules differ by state and change often. Check the tax authority or a qualified professional for your own situation.