Bill > SB1407

This bill amends California's Personal Income Tax Law to expand and extend tax exclusions for military retirement pay and survivor benefit pay. Specifically, it removes income limitations previously applied to taxpayers receiving these benefits, meaning individuals will no longer need to meet certain adjusted gross income thresholds to qualify for the exclusion. Additionally, the bill eliminates the previous $20,000 annual limit on the amount of military retirement pay or survivor benefit pay that can be excluded from gross income. The exclusion for military retirement pay is for service in the uniformed services, which includes the Armed Forces, National Guard, Public Health Service, and NOAA Commissioned Officer Corps. The exclusion for survivor benefit pay applies to payments received under the United States Department of Defense Survivor Benefit Plan, which provides benefits to surviving spouses and beneficiaries of service members. These changes are effective for taxable years beginning on or after January 1, 2025, and are extended until taxable years beginning before January 1, 2037, with the stated goals of recognizing military families' sacrifices and providing financial relief to those who have lost a loved one. The bill also includes provisions for tax expenditure reporting and takes effect immediately as a tax levy.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB1407