An Orange County assemblyman Tuesday unveiled legislation to make military Survivor’s Benefits tax-exempt in California, while three Southland senators announced a bill that would exempt military retirement pay from the state income tax.
“It is absolutely wrong that California taxes the meager financial support provided to the surviving spouses and children of our nation’s heroes,” said Assemblyman Steven Choi, R-Irvine. “California is one of only two states that taxes this support as income.”
Nearly 30,000 children and spouses in California receive survivor’s benefits averaging $1,300 a month, and 90% of the recipients are over the age of 65, according to Choi’s office.
“When crafting this legislation, taking care of our nation’s heroes and families is the primary goal,” Choi said. “I am appalled that California brands itself the leader of compassionate legislation and yet is one of the only states that does not help widows and orphans.”
AB 2380 will be referred to committee for debate.
SB 1071, the military retirement pay bill, was jointly authored by Sens. Scott Wilk, R-Santa Clarita, Patricia Bates, R-Laguna Niguel, and Bob Archuleta, D- Pico Rivera, who chairs the Senate Veterans Affairs Committee.
Wilk said veterans’ “skill sets, education and earning potential make them a great asset” to the state.
“We want to keep this talent here as well as show our respect for their service to our nation,” he said. “Without some kind of incentive, California’s infamously high taxes and cost of living will continue to push the veteran community right out of state.”
According to Wilk, 43 states provide partial or full exemptions for military retirees who establish residency in their state. He said California is one of seven states that fully taxes military retirement pay.
California’s military retirement population declined by 17% between 2000 and 2016, while the nation’s military retirement rate increased 17% between those years, according to Wilk.
The vast majority of military retirees are in their mid-40s and assume new careers post retirement in fields such as engineering, computer science, management, health care, communications, and education, according to the bill’s authors.
“California’s military veterans deserve better from Sacramento than having their retirement pay that they worked so hard for to be taxed,” Bates said. “That is why I am proud to jointly co-author Senator Wilk’s common sense measure to provide tax relief to our veterans. It will help keep more veterans in California by giving them an incentive to pursue a second career here, instead of in other states.”