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

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 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.

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.