By MOAA Staff 

MOAA National serves in an advisory capacity for state-specific issues such as income tax exemption. Please contact your local MOAA council as state legislation must originate at the state level. 

At least a half-dozen state legislatures are considering bills that would expand tax exemptions for uniformed services retirees … including a bill in the nation’s most populous state that could quadruple the existing exemption.

Here’s a look at movement across four states, along with the latest from MOAA members who are taking part in local advocacy efforts. As of May 6, the status of bills in Connecticut and South Carolina that would expand exemptions in those states to cover U.S. Public Health Service and NOAA Corps officer retirees had not changed since their introduction.

[RELATED: MOAA’s Military State Report Card and Tax Guide]

California

The Bill: SB 1407 would increase the income limit for the state’s uniformed services retirement pay exclusion from $20,000 to $80,000. It covers survivor benefits as well as retirement benefits earned by USPHS and NOAA officers.

The Backstory: After years of advocacy by local MOAA members and other uniformed services advocates, the state passed tax relief for uniformed services retirees and survivors but instituted a $20,000 limit. SB 1407 initially removed the cap entirely, but the bill was amended April 9 to include an $80,000 limit.

Grassroots Efforts: “SB 1407 is the next logical step in a fight that California’s uniformed service retirees and survivors have carried for years,” said Capt. Ramona Chávez, USAF (Ret), president of MOAA’s California Council of Chapters (CALMOAA). “Last year’s tax relief was a historic breakthrough, but the $20,000 cap left too many veterans and surviving spouses behind — especially those who built second careers or live in high-cost communities. CALMOAA’s grassroots network will continue showing up, writing, calling, and meeting with legislators to ensure this benefit is meaningful and inclusive. Raising the limit to $80,000 is a step closer to honoring military service with real, practical relief.”

[RELATED: CALMOAA President on Advocacy Success]

Delaware

The Bill: SB 219 would expand the existing $12,500 retirement exemption for uniformed services retirement pay and eliminate the age requirement (the exemption is currently available to those age 59 and younger). It would move the exemption to $15,000 for the 2027 tax year, $20,000 in 2028, and $25,000 in 2029.

A March amendment to the bill adds residency restrictions for those age 60 or older to qualify for the exemption. Those living in the state before Jan. 1, 2027, must be “legally domiciled” in Delaware for at least three years to qualify, while those who move to the state on or after that date must wait five years to become eligible.

The Backstory: The bill was reported out of the Senate Executive Committee on March 25 and assigned to the Senate Finance Committee that same day. A 2024 bill that would have expanded the exemption did not move past the Executive Committee. Delaware expanded its exemption to cover retired USPHS and NOAA officers in 2024.

Grassroots Support: “We had a good turnout of veterans in the gallery,” said Col. Gene Thornton, USA (Ret), president of the MOAA Dover Chapter, which has fought to expand the exemption. “I spoke as part of the legislator’s presentation and pointed out the benefits of the bill. Many others spoke during the remarks portion. The residency restriction for those over 60 is not a concern since our focus remains on retaining or attracting retirees young enough to work a 20-year, fully taxable career in Delaware.”  

[RELATED: Why Now Is the Perfect Time to Kick Off Next Year’s Taxes]

Michigan

The Bill: HB 5280 would exempt USPHS and NOAA officer retirement pay from state taxes, creating parity with the other uniformed services. The change would take effect for the 2026 tax year. The law also ensures members of all uniformed services are eligible for a range of state tax breaks related to service-connected disabilities.

The Backstory: The bill, which would amend Michigan’s 1967 tax act, was introduced last year and referred to the House Committee on Government Operations, where no action has been taken since Nov. 12. The bill would need to be reintroduced next year if not acted on during the current session.

Grassroots Efforts: The legislative committee of MOAA’s Michigan Council agreed April 30 to seek full council support for HB 5280 and generated a “battle plan” to further advocate for the bill’s passage. The council is expected to consider the bill this month. “HB 5280 is a simple, fair, and low-cost fix that ensures all who serve in the nation’s uniformed services are treated equally under Michigan tax law,” states the committee’s one-pager on the bill.

New Jersey

The Bill: S1194 would expand the state’s retirement tax exemption to USPHS and NOAA officers by changing the existing law to cover all uniformed services instead of armed services. The law also makes USPHS and NOAA officers eligible for the state’s $6,000 exemption available to all veterans “honorably discharged or released under honorable circumstances” from active or reserve component service, or the New Jersey National Guard.

The Backstory: Introduced Jan. 13, the bill has been in the Senate Military and Veterans’ Affairs Committee since with no action taken. There is no companion legislation in the state’s General Assembly. The 2025 version of the legislation did not move from committee after its October introduction.