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SW Riverside News

Wednesday, December 18, 2024

Bill proposes tax exemption on veteran benefits in California

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State Senator Kelly Seyarto, District 32 | Official U.S. Senate headshot

State Senator Kelly Seyarto, District 32 | Official U.S. Senate headshot

Today marks the beginning of the 2025-2026 legislative session. A new bill, SB 1, has been introduced to address the taxation of military retirement income and Survivor Benefit Plan (SBP) payments in California.

The bill aims to relieve veterans and their families from what is described as an "undue burden" of taxed military retirement income and SBP payments. Military retirement benefits are earned by serving twenty years or more in the nation's military. SBPs function similarly to a life insurance policy, where service members can opt to pay into them. These benefits, paid out after a service member's death, are currently considered taxable income.

California stands as the only state that fully taxes both military retirement income and SBPs. The proposed legislation seeks to align California with other states by exempting these incomes from taxation, thus honoring veterans for their service and sacrifice.

Currently, over 27,000 surviving family members and 141,000 retirees receive such benefits within California. The aim is to ensure these individuals are not unfairly burdened by taxation.

The legislator emphasized: "These individuals have given everything to serve our country; we must now do our part to support them."

The session also welcomed new colleagues to the Legislature, with gratitude expressed for continued trust and confidence in representing the 32nd District.

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