Active-duty and reserve pay
Active-duty pay of California residents is exempt when they are stationed outside California. Pay earned while stationed in California is taxed.
An E-5 with over 6 years of service earns $49,320 a year in basic pay. If those conditions are met, California does not tax it. If not, the full $49,320 counts as California income. Housing and food allowances are never taxed by any state.
Military retired pay
Up to $20,000 of military retired pay can be excluded, for households under the state income limits.
Your state of legal residence decides
Military pay is taxed by your state of legal residence, usually the state you lived in when you joined or one you later adopted by changing your records, not by the state where you are stationed. This comes from the Servicemembers Civil Relief Act. Spouses can choose to use the member's state of legal residence for their own income too.
See your total pay with state tax
Questions
Does California tax military pay?
California exempts military pay only in certain cases, mainly when you are stationed outside the state. Active-duty pay of California residents is exempt when they are stationed outside California. Pay earned while stationed in California is taxed.
Does California tax military retirement pay?
Up to $20,000 of military retired pay can be excluded, for households under the state income limits.
Is BAH taxed in California?
No. BAH and BAS are not taxable income for federal or state tax in any state.
Which state taxes me if I am stationed in California?
Under the Servicemembers Civil Relief Act, your military pay is taxed only by your state of legal residence, not the state where you are stationed. If California is not your legal residence, California does not tax your military pay.