Military Retirement Pay Partial Tax Exclusion
Exclude up to $20,000 of military retired pay from California state income tax (tax years 2025-2029 per SB 1, 2025-2026 session).
State BenefitCaliforniaTax Benefits
Verified September 30, 2026 against ftb.ca.gov
At a glance
- Benefit type
- Tax Benefits — California
- Who it's for
- Veterans, Survivors
- VA rating needed
- No rating requirement
- Estimated value
- Up to $20,000 exclusion
- Where it applies
- California
- Last verified
- September 30, 2026
What is Military Retirement Pay Partial Tax Exclusion?
Military Retirement Pay Partial Tax Exclusion is a California tax benefits benefit for veterans, survivors. Exclude up to $20,000 of military retired pay from California state income tax (tax years 2025-2029 per SB 1, 2025-2026 session). The listed value is Up to $20,000 exclusion.
Who qualifies
- Veterans
- Survivors
- Available to any veteran
- California residency
Who is eligible
Eligibility
Military retirees (all branches including USPHS and NOAA) with federal AGI under $125,000 (single) or $250,000 (joint filers). Also applies to Survivor Benefit Plan (SBP) annuitants at same income thresholds.
What Military Retirement Pay Partial Tax Exclusion covers
Covers
Excludes up to $20,000 of military retired pay or SBP annuity from California state income tax per year.
Duration
Taxable years beginning on or after January 1, 2025, and before January 1, 2030 (i.e., tax years 2025-2029) per SB 1 (Military Services Retirement and Surviving Spouse Benefit Payment Act, 2025-2026 session).
Estimated savings
LAO estimated the maximum benefit at about $600/year for the average military retiree; max savings depends on filer's marginal rate.
How to apply for Military Retirement Pay Partial Tax Exclusion
How to apply
Claimed on your California state tax return via the Franchise Tax Board.
Verified information & sources
- Last verified
- September 30, 2026
- Official source
- ftb.ca.gov
Compiled and fact-checked against the official source linked above. Benefit rules and dollar amounts change over time — always confirm current details at the official source before applying. A county Veterans Service Officer (VSO) is a free, accredited advocate who can review your eligibility and help you file at no cost.
How VetUnlock verifies benefitsFrequently asked questions about Military Retirement Pay Partial Tax Exclusion
Who qualifies for Military Retirement Pay Partial Tax Exclusion?
Military Retirement Pay Partial Tax Exclusion is for Veterans, Survivors; available to any veteran; california residency. See the eligibility details on this page and confirm with the official source before applying.
How much is Military Retirement Pay Partial Tax Exclusion worth?
The listed value is Up to $20,000 exclusion. Amounts can change — confirm the current figure at the official source linked on this page.
How do I apply for Military Retirement Pay Partial Tax Exclusion?
Apply through the official source linked on this page. A county Veterans Service Officer (VSO) can review your eligibility and help you file at no cost.
Where can I verify Military Retirement Pay Partial Tax Exclusion?
Benefit rules and dollar amounts change, so always confirm current details at the official source linked on this page. A free, accredited county or state Veterans Service Officer (VSO) can also verify your eligibility and help you apply.