Today's Law As Amended

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AB-528 Personal income taxes: exclusion: military retirement pay.(2017-2018)



SECTION 1.

 Section 17132.9 is added to the Revenue and Taxation Code, to read:

17132.9.
 (a) For each taxable year beginning on or after January 1, 2018, and before January 1, 2023, gross income shall not include qualified retirement pay received by a qualified taxpayer from the federal government for military service performed in the Armed Forces of the United States, the reserve component of the Armed Forces of the United States, or the National Guard.
(b) For purposes of this section:
(1) “Qualified retirement pay” means all of the following:
(A) One hundred percent of retirement pay received in the first 12-month period after the taxpayer leaves military service. If the taxpayer subsequently performs military service, this subparagraph shall also apply to the first 12-month period after the taxpayer leaves that subsequent service, as long as subsequent military service is performed in the same service branch, active duty, reserve, or the National Guard, as the original military service. For purposes of this subparagraph, a performance of military service means a tour of duty lasting no less than six months.
(B) Eighty percent of retirement pay received in the 12-month period immediately subsequent to the period described in subparagraph (A).
(C) Sixty percent of retirement pay received in the 12-month period immediately subsequent to the period described in subparagraph (B).
(D) Forty percent of retirement pay received in the 12-month period immediately subsequent to the period described in subparagraph (C).
(E) Twenty percent of retirement pay received in the 12-month period immediately subsequent to the period described in subparagraph (D).
(2) “Qualified taxpayer” means a taxpayer with gross income that, excluding retirement pay received by the taxpayer from the federal government for military service performed in the Armed Forces of the United States, the reserve component of the Armed Forces of the United States, or the National Guard, does not exceed fifty thousand dollars ($50,000).
(c) This section shall remain in effect only until December 1, 2023, and as of that date is repealed.
SEC. 2.
 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.