As California and the nation prepare to celebrate the 249th “birthday” of the Declaration of Independence, military retirees and their survivors will have a special reason to celebrate: a state tax deduction of up to $20,000, included in the recently approved state budget.

Assemblymember James C. Ramos (D-San Bernardino) introduced military retiree tax exemption legislation — AB 53 — earlier this year and twice before in previous legislative sessions.

“I am excited that the 2025-26 state budget includes a tax exemption of $20,000 for military retirees and survivor benefits,” said Ramos. “It’s a great gift to California’s military retirees on the eve of our national birthday. We wouldn’t be here without their sacrifices! I have been working on this effort in the Legislature for some time. My staff and I have worked closely with the Governor’s staff to ensure that California at long last acknowledges the sacrifices of veterans and their families. We were the only state that does not exempt military pensions in whole or in part. That changes now.”

AB 53 has received overwhelming bipartisan support in the Assembly.

The lawmaker added, “I championed this effort not only to recognize the sacrifices of our veterans, but also because California must become more attractive as a place for active duty personnel to retire. We must do more to make California veteran friendly because we need the skills and talents of our military retirees as they pursue second careers after retirement. Their diverse workforce skills attract investment to our state and contribute to thriving neighborhoods.” 

Jeffrey Breiten, of the Marine Corps League-Department of California Legislative Affairs office said, "Assemblymember Ramos's strong support for California's military community is without question. Assemblymember Ramos has been working diligently for the last three years to remove the stigma of California being the only state in the nation that fails to provide an exemption on military retirement pay, and he continues that battle today. I want to thank the Assembly member for his continued staunch support of our nation's veterans and military retirees and Governor Newsom for recognizing the economic benefits that military retirees bring to the state they chose to call home after their 20 plus years of military service to our great nation."

California is the only state that does not offer any tax exemption on military pensions to its 141,000 military retirees. The San Diego Military Advisory Council reports that if a tax exemption were in place, economic gains for the state would include 12,600 more jobs, $1.27 billion added to the GSP and $2 billion added to total business sales.

AB 53 is jointly sponsored by the American Legion-Department of California, the Marine Corps League-Department of California, the California Association of County Veteran Service Officers, California Military Officers Association of America, the Enlisted Association of the California National Guard of the United States and the California State Commanders Veterans Council.

A partial list of supporters includes Vietnam Veterans of America, California, Women Veterans Alliance, San Diego Regional Chamber of Commerce, California State Commanders Veterans Council, the California State Treasurer, California State Board of Equalization and California State Retirees.