SB 1: Personal income taxes: exclusion: Military Services Retirement and Surviving Spouse Benefit Payment Act.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

The Personal Income Tax Law, in conformity with federal income tax laws, defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income, including an exclusion for combat-related special compensation.

This bill, for taxable years beginning on or after January 1, 2025, and before January 1, 2035, would exclude from gross income retirement pay received by a qualified taxpayer, as defined, during the taxable year, not to exceed $20,000, from the federal government for service performed in the uniformed services, as defined. The bill, for taxable years beginning on or after January 1, 2025, and before January 1, 2035, would also exclude from gross income annuity payments received by a qualified taxpayer, as defined, during the taxable year, not to exceed $20,000, pursuant to a United States Department of Defense Survivor Benefit Plan. The bill would make related findings and declarations.

Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill also would include additional information required for any bill authorizing a new tax expenditure.

This bill would take effect immediately as a tax levy.

Sponsors

Sponsors by party (alphabetical): Republican 10

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. February 2, 2026Returned to Secretary of Senate pursuant to Joint Rule 56.
2. May 23, 2025May 23 hearing: Held in committee and under submission.
3. May 16, 2025Set for hearing May 23.
4. May 12, 2025May 12 hearing: Placed on APPR. suspense file.
5. May 2, 2025Set for hearing May 12.
6. April 29, 2025From committee: Do pass and re-refer to Com. on APPR. (Ayes 4. Noes 0. Page 918.) (April 28). Re-referred to Com. on APPR.
7. March 28, 2025Set for hearing April 28.
8. March 12, 2025From committee: Do pass and re-refer to Com. on M. & V.A. (Ayes 5. Noes 0.) (March 12). Re-referred to Com. on M. & V.A.
9. February 26, 2025Set for hearing March 12.
10. February 20, 2025From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX.
11. January 29, 2025Referred to Coms. on REV. & TAX. and M. & V.A.
12. December 3, 2024(Corrected December 12).