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

Plain English Breakdown

The official source does not provide specific details on how much more money taxpayers will save due to the changes.

Tax Exclusion for Military Retirement Pay

The bill increases the amount of military retirement pay and survivor benefit payments that are not taxed to $80,000 per year, adjusts this limit for inflation each year, and extends these rules until January 1, 2037.

What This Bill Does

• Increases the amount of military retirement pay and survivor benefit payments excluded from taxes to $80,000 per year.
• Adjusts the tax exclusion limit for inflation each year.
• Extends the exclusions until January 1, 2037.

Who It Names or Affects

• People who receive military retirement pay or survivor benefit payments from the federal government.

Terms To Know

Qualified taxpayer

A person who meets certain income limits set by tax laws.

Inflation adjustment

An increase in a limit or amount to match the rising cost of living over time.

Limits and Unknowns

• The bill does not specify how much more money will be saved by taxpayers due to these changes.
• It is unclear if there are any limits on who can receive survivor benefit payments under this law.

Official Summary Text

SB 1407, as amended, Archuleta.
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
annually adjust
the income limitations for taxpayers
for inflation, as provided,
and to
eliminate the $20,000
increase the
limitation on income eligible for
exclusion.
exclusion to $80,000.
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.

Current Bill Text

Download Bill PDF