Keep More of What You Earned

This is general information, not tax advice. Your legal residence, your spouse's job and your other income all change the answer. The base legal office and the free military tax help programs can look at your own return.

Moving here on orders does not change your legal residence. You keep your home state unless you choose to change it.

If you are a nonresident, California still taxes income that comes from California. That means civilian wages from an off duty job here, and rent or business income from California property. You file a nonresident return, form 540NR, for that income.

Under federal law a military spouse can keep the service member's state of legal residence for tax purposes, or choose it, even without having lived there. When that state is not California, the spouse's wages earned here are generally not taxed by California.

To stop California withholding, the spouse gives the employer form DE 4 and claims the exemption. State disability insurance still comes out of the paycheck.

This changed. California used to tax military retirement pay in full. For tax years 2025 through 2029, state law lets you exclude up to $20,000 a year of military retirement pay. Survivor Benefit Plan annuities count too.

Earn more than the limit and the exclusion does not apply. You claim it on Schedule CA of the California resident return. Retirement pay above $20,000 is taxed as ordinary income.

Thinking about retiring here? The getting out guide covers jobs, benefits and housing.

• VA disability compensation is not taxed by California or the federal government.
• Concurrent Retirement and Disability Pay is retirement pay, and it is taxable.
• Combat zone pay that is excluded federally is excluded by California too.
• BAH and BAS are not taxed.

California property tax is predictable, and that helps you plan.

• The base rate is 1 percent of the purchase price. Local bonds bring most Ventura County homes to about 1.1 to 1.17 percent.
• Your assessed value can rise no more than 2 percent a year while you own the home.
• New construction areas can add special assessments. Ask before you write an offer.
• Bills come in two halves, due November 1 and February 1. They are late after December 10 and April 10.
• After you buy, expect a one time supplemental bill that trues up the tax to your purchase price.
• The homeowners' exemption takes $7,000 off your assessed value. File it once with the County Assessor.

On a $700,000 home, plan on about $7,700 to $8,200 a year, or roughly $640 to $680 a month. The mortgage calculator puts it in a full payment.

Veterans with a 100 percent disability rating can take far more off. The SB 296 page has the new numbers.