Uniformed Services Retirement May Not Be Fully Taxed By California

California’s new budget has a favorable provision for retirees of the uniformed services.

There is a new $20,000 uniform services retirement pay exclusion for taxpayers with adjusted gross income (AGI) of $125,000 or less ($250,000 MFJ and surviving spouses) for the 2025 through 2029 tax years.

So this law is retroactive to January 1, 2025.

“Uniformed services” means the Armed Forces of the United States, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, the commissioned corps of the United States Public Health Service, and the National Oceanic and Atmospheric Administration Commissioned Officer Corps.