Direct answer
Yes, California generally taxes annuity income as ordinary income, though the portion of the payment representing a return of your original principal is typically excluded from taxation.
California Franchise Tax Board publications regarding the taxation of retirement and annuity income. For official guidance regarding state tax treatment of retirement distributions, see the California Franchise Tax Board website.
What this means for you
Yes, California generally taxes annuity income as ordinary income, though the portion of the payment representing a return of your original principal is typically excluded from taxation.
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