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Senate subcommittee advances SB 1 to exempt part of military retirement pay from California income tax
Summary
A Senate subcommittee voted 4-0 to pass SB 1 out of committee to the appropriations committee. The bill would exempt the first $20,000 of military retirement and survivor benefits from state income tax for taxpayers below specified adjusted gross income thresholds.
Senate subcommittee members advanced SB 1, a bill to exempt a portion of military retirement and survivor benefits from California income tax, voting unanimously to refer the measure to the Senate Appropriations Committee.
The bill’s author, Senator Cialdo, said SB 1 "exempts the first 20000 dollars from military retirement and survivors' benefits pay and can only be applied to families with an adjusted gross income under $250,000 or an individual's AGI under $125,000." He told the subcommittee that California is the last state that fully taxes military retirement pay and survivor benefits and that the change is meant to align the state with other states that offer such exemptions.
SB 1 would limit the exemption to the first $20,000 of military retirement or survivor benefit payments and would apply only to taxpayers whose adjusted gross income falls below the bill’s thresholds. Supporters told the committee that the proposal would help retain veterans and their families in California.
Nicole Wertleman, speaking for the San Bernardino County Board of Supervisors, and several veterans' organizations — including the Military Officers Association of America chapter and the California Enlisted Association — testified in support. "We appreciate your effort," Steve Vassell of a military officers group said during testimony in favor of the bill.
Chair Archuleta acknowledged the room of supporters and, after a later roll call, the subcommittee recorded a 4-0 vote to pass SB 1 out of committee and refer it to the Senate Appropriations Committee.
The hearing record shows broad organizational support by local veterans groups and county officials. The bill’s text, fiscal impact and any amendments will be considered in the appropriations process.
Votes at a glance: Senate Bill 1 — Do pass and refer to Appropriations; recorded vote 4-0.
The subcommittee will consider SB 1 further if and when it reaches the appropriations committee; no implementation timeline was set during the hearing.
