California retired veterans and families to benefit from new military pension tax exemption

REDLANDS, Calif. (KABC) -- Veterans have served and sacrificed for our nation, and on Tuesday, the state of California announced a new law to help them in retirement.

That law will exempt part of their military pensions from state income tax.

At American Legion Post 106 in Redlands, Assemblymember James Ramos (D-San Bernardino) stood before retired veterans and their families to share news many had long waited to hear: starting in 2025, California will exempt part of their military pensions from state income tax.

"The state of California has joined other states now in truly honoring our veterans in the state of California," said Ramos.

The exemption, included in this year's state budget and signed by Gov. Gavin Newsom, allows retirees and surviving spouses to deduct up to $20,000 from their state taxes beginning with 2025 income tax returns.

Senator Bob Archuleta (D-Pico Rivera), who helped champion the measure alongside Ramos, said the policy is about keeping veterans and their valuable skills in California.

"This bill says the first $20,000 of your retirement is tax-free," Archuleta said. "Consequently, maybe now you can stay in California with your energy, your experience, your knowledge and skill that you learned in the military."

California has been losing retired service members to states with more favorable tax policies. Department of Defense data shows that while the nation's population of retired veterans grew, California saw its numbers decline.

"We've seen a dramatic decline in the number of military retirees in California," said Jeffrey Breiten of the California State Veterans Commanders Council. "We're trying to stop that, reverse that, keep them and their federal dollars in California."

A study by the San Diego Military Advisory Council found that such a tax break could generate:

• 12,600 new jobs
• $830 million in additional personal income
• $1.2 billion to California's Gross State Product
• $2 billion in total business sales

For veterans, the difference will be felt at home.

"Put food on the table, do that extra repair that needs to be done at the house, you know, fix an appliance, put their kids through school, whatever it is, $20,000 is a lot of money," said Aaron Weinke, a Marine veteran with the Victor Valley Marine Corps League.

Surviving spouses will also benefit. Kathy Prout, whose husband was killed while serving in the Navy, called it a meaningful step.

"This is really going to impact the surviving families," Prout said. "Even the $20,000 will make a big difference for most of them."

Lawmakers say this is only the beginning.

"The next step is to increase or to look at full exemption for the state of California," Ramos said.

For now, the measure is set to sunset in 2030. Advocates hope it becomes permanent, calling it a lasting way to honor the men and women who served and their families who sacrificed alongside them.