Personal income taxes: exclusion: military retirement pay.

The Personal Income Tax Law provides various exclusions from gross income in determining tax liability, including an exclusion for combat-related special compensation and death benefit payments received by a surviving spouse or other beneficiary designated by a military veteran, as prescribed, who dies or is killed in the performance of duty, as provided. This bill, for taxable years beginning on and after January 1, 2016, and before January 1, 2019, would exclude from gross income retirement pay received by a 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, and survivor benefits received by a taxpayer from the federal government, as specified. The bill would make these provisions operative on the effective date of any budget measure specifically appropriating funds to the Franchise Tax Board for its costs of administering these provisions. This bill would take effect immediately as a tax levy.