The taxable amount of an IRA distribution is ordinary income, so there is no California calculation involved that is specific to the IRA distribution. The taxable amount is included in federal AGI is not reduced on your California tax return when computing the California income tax [Edit: unless you have California basis in nondeductible contributions made in 1987 or between 1982 and 1987 which you will need to have tracked to be able to claim; see VolvoGirl's post below and FTB Pub 1005]. Because you are over age 59½, the Form 1099-R will have code 7 indicating that there is no early-distribution penalty.
Income from an IRA is income in your state of residence. If you are a California resident, the IRA distribution is California income. If you are not a California resident, the IRA income is not California income.
