Personal Income Tax Law: exclusions from income: retirement: overtime.

Labor Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Macedo
Last action: 2026-04-13
Official status: In committee: Set, first hearing. Referred to REV. & TAX. suspense file.
Effective date: Not listed

Plain English Breakdown

The official source does not provide details on the requirement for new tax expenditures, so it was removed.

Tax Changes for Retirement and Overtime

AB-2336 excludes the first $25,000 of retirement benefits from defined benefit plans and overtime pay from a person's taxable income in California starting January 1, 2026.

What This Bill Does

Excludes up to $25,000 in retirement benefits received as proceeds from a defined benefit plan from a taxpayer’s gross income for tax years beginning on or after January 1, 2026, until December 31, 2030.
Excludes up to $25,000 of overtime pay received by taxpayers during the taxable year from their gross income for tax years beginning on or after January 1, 2026, until December 31, 2030.

Who It Names or Affects

Taxpayers who receive retirement benefits from a defined benefit plan
Workers who earn overtime pay

Terms To Know

Defined Benefit Plan: A type of pension plan where the amount of money an employee receives when they retire is based on their salary and how long they worked for the company.

Limits and Unknowns

The bill only applies to taxable years from January 1, 2026, until December 31, 2030.
It is unclear how many people will benefit from the changes in this bill.

Bill History

2026-04-13 California Legislative Information
In committee: Set, first hearing. Referred to REV. & TAX. suspense file.
2026-04-06 California Legislative Information
In committee: Hearing postponed by committee.
2026-03-09 California Legislative Information
Referred to Com. on REV. & TAX.
2026-02-20 California Legislative Information
From printer. May be heard in committee March 22.
2026-02-19 California Legislative Information
Read first time. To print.

Official Summary Text

AB 2336, as introduced, Macedo.
Personal Income Tax Law: exclusions from income: retirement: overtime.
The Personal Income Tax Law, in modified 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.
This bill would, for taxable years beginning on or after January 1, 2026, and before January 1, 2031, exclude from gross income the first $25,000 of overtime pay received by a taxpayer during the taxable year. The bill would also exclude from gross income the first $25,000 received by a taxpayer as proceeds from a defined benefit plan, as defined.
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.

Current Bill Text

Read the full stored bill text

Download Bill PDF