California - Military Retirement/Pension Income
Desktop · Written guide Content date 1 min read
Military retirement pension is taxable in California and is required to be included in gross income on the California resident return.
Retirement Pay Exclusion
For tax years 2025 through 2029, California allows qualified taxpayers to exclude from gross income up to $20,000 each of the following two kinds of income:
- Retirement pay from the federal government for service in the uniformed services.
- Annuity payments received pursuant to a U.S. Defense Department Survivor Benefit Plan.
To qualify for the exclusion, the taxpayer's federal AGI must not exceed $250,000 for a joint filer or qualifying surviving spouse, or $125,000 for an individual filer.
To enter the military retirement exclusion in the California resident individual income tax return in Tax Processors Plus Desktop, from the California Tax Return Menu select:
- California Taxable Income
- California Subtractions from Federal AGI
- Pensions & Annuities
- Adjust Line 2 (+/-) - Enter the amount to exclude.
Additional Information:
California FTB: Military Information
California FTB: Form 540 instructions
California FTB: Schedule CA (Form 540) instructions
California FTB: Publication 1032, Tax Information for Military Personnel
Tax Processors Plus Desktop strives to keep the information on this page timely and accurate but makes no promise or guarantee about the timeliness, accuracy, or completeness of the contents of this page. This is general information and is not intended to be tax advice. You are encouraged to also review the underlying state resources and publications.