California aims to limit taxes on military retirement income

At least Eight attempts In the legislature, California can finally join any other country, providing at least some tax exemptions for military retirement income that supporters claim will help veterans remain in the state and contribute to a qualified workforce.

Assembly James Ramos for the third time introduced a bill that would Allow veterans to release Up to $ 20,000 from their federal pensions if they were less than $ 125,000 a year. He narrowed his account from last year, which seeks to release the full retirement income of a veteran. Seni. Kelly SyrtoRepublican from Muruta, introduced a Senate’s similar billS

Overall, about 1.4 million veterans live in California, of which 141,000 receive military retirement income, according to the latest data available by the US Department of Defense. Another 26,000 Californians receive survivors.

Ramos said the state would take advantage of the retention of veterans in California, where he could work in other industries after withdrawing from the military and further contributes to the tax base. California is home to the Navy Pacific Navy and tens of thousands of Marines in Pentelon Camp.

“They bring tested expertise to work in our workforce in California, they live in our communities and serve as volunteers and leaders,” says Ramos, Democrat from San Bernardino. “California cannot afford not to run the welcome for our veterans.”

The purpose of the two bills, the legislators say, is to try to keep more military retirees in California. The state has observed its retired military population to decrease due to moves and death outside the state by about 28% of over 195,000 in 2000 to just over 141,000 in 2022According to the US Department of Defense. The decline in California during this time was second after the Colombia County, where it decreased by 35%.

The data was not available for the employment rate among military pensioners – those who have served for at least 20 years. But among the wider group of veterans between the ages of 35 to 64, about 96% of those still in the workforce in California are hired, according to data from the Bureau of Labor Statistics.

“The main factor is the costs of life”

Veterans leave the state for many reasons, “But the main factor is the cost of life,” David Boone, President of the San Diego Military Advisory Council, testifies to A Recent State Committee on Taxes and Revenue Hearing the billo bill.

“The countries that win veterans have developed strategies to direct and attract veterans in their country,” he said.

California military retirees receive approximately $ 29,000 each year – A total of about $ 4 billion a year by 2022, according to the Ministry of Finance. The surviving veteran relatives receive a combined $ 400 million.

If the tax account becomes a law, California will lose an average of $ 600 income from income tax from each of the 130,000 eligible veterans as per Legislative analyzer.Gov. Gavin Newsom offers a similar idea through its budget proposal. His service estimates that it will cost the state around $ 130 million in the next fiscal year and $ 85 million each year after that.

But the financial incentive may be too small to persuade retirees to stay in California, noted the office of the legislative analyzer, making a little to achieve the goal of the state to make the state more competitive destination.

This is the case with Sue Johnson, a former Californians who retired in Nevada after serving 27 years in the Air Force and the National Air Guard.

“Even if she passed, at that moment I don’t think it’s enough,” she said. “And for my husband and I … We both had nothing and we worked hard throughout our lives, but then to get to the point where this is not recognized in state policies … It’s just too much.”

Teachers, firefighters, police may like tax relief

Senate officials Revenue and Tax Committee It also causing concern that the billo’s bill can set a precedent for other professions.

“If the legislature dismisses retirement income for a line that provides direct benefit to the public, why should it not expand the same treatment of other commendable professions as teachers, firefighters or police officers?

Military pensioners and surviving relatives pay state and federal income taxes in California, but receive the exemptions from military death benefits paid to qualified survivors, pay for time in combat zones and partial exemptions from ownership tax.

Of the 41 states that have a state income tax, 25 countries completely released the military retirement income, and the rest partially releases it.

The State analyst said California could see a non -monetary value for the proposal: “He will no longer be the only country that fully taxes military retirement income.