SB 1407: Personal Income Tax Law: exclusions: military retirement pay: survivor benefit pay.

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, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, an exclusion from gross income for 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, and an exclusion for income annuity payments received by a qualified taxpayer, as defined, not to exceed $20,000, pursuant to a United States Department of Defense Survivor Benefit Plan, as specified. Existing law defines “qualified taxpayer” for the purpose of these exclusions to mean taxpayers that satisfy specified income limitations.

This bill would amend the above-described exclusions to annually adjust the income limitations for taxpayers for inflation, as provided, and to increase the limitation on income eligible for exclusion to $40,000. The bill would also extend the exclusions until taxable years beginning before January 1, 2037.

Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals 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): Democratic 3 · Republican 3

“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. August 13, 2026August 13 hearing: Held in committee and under submission.
2. August 5, 2026August 5 set for first hearing. Placed on suspense file.
3. June 30, 2026From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (June 29). Re-referred to Com. on APPR.
4. June 23, 2026June 22 set for first hearing. Placed on suspense file.
5. June 17, 2026Coauthors revised.
6. June 17, 2026From committee: Do pass and re-refer to Com. on REV. & TAX. (Ayes 8. Noes 0.) (June 16). Re-referred to Com. on REV. & TAX.
7. June 8, 2026Re-referred to Coms. on M. & V.A. and REV. & TAX. pursuant to Assembly Rule 96.
8. June 4, 2026Referred to Coms. on REV. & TAX. and M. & V.A.
9. May 28, 2026In Assembly. Read first time. Held at Desk.
10. May 28, 2026Read third time. Passed. (Ayes 39. Noes 0. Page 4526.) Ordered to the Assembly.
11. May 26, 2026Ordered to special consent calendar.
12. May 18, 2026Read second time. Ordered to third reading.