Does California tax military retirement pay?
Partly taxed
Partly. For 2025 through 2029, California lets a qualified taxpayer exclude up to $20,000 of military retirement pay or Survivor Benefit Plan annuity payments. The rest is taxed.
In the state's own words
Copied word for word from the official document linked below each quote:
“For taxable years beginning on or after January 1, 2025, and before January 1, 2030, California law allows an exclusion from gross income for a qualified taxpayer that received retirement pay from the federal government for service in the uniformed services or annuity payments pursuant to a United States Department of Defense Survivor Benefit Plan during the taxable year, not to exceed $20,000.”
Other retirement income in California
Yes. California generally taxes pensions the same way the federal return does; its instructions say no adjustment is usually made for them. For 2025 through 2029 it allows an exclusion of up to $20,000 of military retirement pay. The California pension page has the details, and the California Social Security page covers Social Security. No. California excludes Social Security benefits from taxable income.
Before you file or move
This page is about state income tax only. Your federal return has its own rules for military retired pay, and VA disability compensation is a separate benefit from retired pay. State rules change, and the details (age, years, which kinds of pay qualify, survivor benefits) matter. Check with the California Franchise Tax Board before you file or move.
Other states in the same group
Check our work
The answer above comes from this document. Follow the link and compare.
- 2025 Instructions for Schedule CA (540NR)California Franchise Tax Board. Read on November 13, 2026.