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<ns0:Id>20250SB__140799INT</ns0:Id>
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<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-20</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>SB</ns0:MeasureType>
<ns0:MeasureNum>1407</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Archuleta</ns0:AuthorText>
<ns0:AuthorText authorType="PRINCIPAL_COAUTHOR_OPPOSITE">(Principal coauthor: Assembly Member Schiavo)</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthor: Senator Choi)</ns0:AuthorText>
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<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Archuleta</ns0:Name>
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<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Schiavo</ns0:Name>
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<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Choi</ns0:Name>
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<ns0:Title> An act to amend Sections 17132.9 and 17132.10 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. </ns0:Title>
<ns0:RelatingClause>taxation, to take effect immediately, tax levy</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Personal Income Tax Law: exclusions: military retirement pay: survivor benefit pay.</ns0:Subject>
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<html:p>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. </html:p>
<html:p>This bill would amend the above-described exclusions to eliminate the income limitations for taxpayers and to eliminate the $20,000 limitation on income eligible for exclusion. The bill would also extend the exemption until taxable years beginning before January 1, 2037.</html:p>
<html:p>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. </html:p>
<html:p>This bill also would include additional information required for any bill authorizing a new tax expenditure.</html:p>
<html:p>This bill would take effect immediately as a tax levy.</html:p>
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<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
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<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
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<ns0:ImmediateEffect>YES</ns0:ImmediateEffect>
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<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>YES</ns0:TaxLevy>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 17132.9 of the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
is amended to read:
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<ns0:Num>17132.9.</ns0:Num>
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(a)
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For taxable years beginning on or after January 1, 2025, and before January 1, 2037, gross income shall not include retirement pay received by a taxpayer during the taxable year from the federal government for service in the uniformed services.
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<html:p>
(b)
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For purposes of this section,
“uniformed services” means the Armed Forces of the United States, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, the commissioned corps of the United States Public Health Service, and the National Oceanic and Atmospheric Administration Commissioned Officer Corps.
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(c)
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This section shall
remain in effect only until December 1, 2037, and as of that date is repealed.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 17132.10 of the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
is amended to read:
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<ns0:Num>17132.10.</ns0:Num>
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<html:p>
(a)
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For taxable years beginning on or after January 1, 2025, and before January 1, 2037, gross income shall not include annuity payments received by a taxpayer during the taxable year pursuant to a United States Department of Defense Survivor Benefit Plan.
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<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section,
“United States Department of Defense Survivor Benefit Plan” or “plan” means a survivor benefit plan established pursuant to Sections 1447 to 1455, inclusive, of Title 10 of the United States Code.
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<html:p>
(c)
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This section shall remain in effect only until December 1,
2037, and as of that date is repealed.
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<ns0:Num>SEC. 3.</ns0:Num>
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
For purposes of complying with the requirements of Section 41 of the Revenue and Taxation Code, with respect to the exclusions allowed by Section 17132.9 and 17132.10 of the Revenue and Taxation Code, as extended by this act, hereafter known as “the exclusions,” the Legislature finds and declares the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The specific goals of the exclusions are as follows:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
To recognize the loss and sacrifice of our military families and give them the support that our community owes them.
</html:p>
<html:p>
(B)
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To provide some financial relief to families that have experienced not only the loss of a loved
one, but also often the loss of the sole income of the family, and who are now trying to make ends meet on a portion of that original income.
</html:p>
<html:p>
(2)
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There is no available data to collect or report with respect to the exclusions.
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(b)
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This section shall remain in effect only until December 1, 2037, and as of that date is repealed.
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<ns0:Num>SEC. 4.</ns0:Num>
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<html:p>This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.</html:p>
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