Personal Income Tax Law: exclusions: law enforcement retirement.

Assembly Member Schiavo proposes a five-year tax exclusion for pension and survivor benefit payments received by California peace officers and their beneficiaries, aiming to retain law enforcement retirees and their families within the state. The measure would exempt qualifying payments from state income tax between January 2025 and January 2030.

The legislation defines two categories of qualified payments: pension distributions to retired peace officers based on their service, and annuity payments to surviving spouses or dependents of officers who died in the line of duty. The tax exclusion applies only to benefits earned through service as a peace officer in California, as defined in state law.

To evaluate the program's outcomes, the Legislative Analyst's Office must submit a comprehensive report by December 2030 analyzing participation rates, economic impacts on beneficiaries, migration patterns of retirees and survivors, and tax implications of post-retirement earnings. The Franchise Tax Board and Department of Justice are required to provide relevant data while maintaining taxpayer privacy protections. The tax exclusion automatically expires on December 1, 2030, unless extended by future legislation.