SACRAMENTO — California has enacted new state-level benefits for military service members and veterans, including tax exemptions, housing investments, and education expansions, as the state observes the 250th anniversary of the Armed Forces.
The state is home to approximately 160,000 active-duty service members and nearly 1.5 million veterans.
Tax and Financial Benefits
Beginning with the 2025-26 fiscal year, military retirees and surviving spouses receiving federal Survivor Benefit Plan payments may exclude up to $20,000 annually from state income taxes. State officials said the measure aims to retain retired service members in California.
The California Department of Veterans Affairs (CalVet) home loan program, which carries no cost to taxpayers, has assisted nearly 450,000 veterans with home purchases. The program reports one of the lowest foreclosure rates in the nation.
Education and Childcare
Governor Gavin Newsom signed legislation this year extending Cal Grant and Middle Class Scholarship eligibility to dependents of active-duty service members who maintain California as their state of legal residence, regardless of current duty station.
The state is also implementing the Military Child Care in Your Neighborhood Plus program in partnership with the Department of Defense to expand access to civilian childcare for military families.
Public schools may receive designation as California Purple Star schools, indicating specific support systems for military-connected students who relocate frequently.
Housing Programs
CalVet has awarded $580.5 million in permanent loan financing to 99 multifamily affordable housing projects through the Veterans Housing and Homelessness Prevention program. As of October 2025, 75 projects have completed construction, with 5,190 units either occupied or in the leasing process. The full pipeline represents 6,561 units of permanent supportive housing.
Funding from Proposition 1, the 2023 behavioral health bond measure, includes $6.4 billion for housing and treatment services. Approximately $2.1 billion is allocated to Homekey+ projects, with roughly half reserved for developments serving veterans.
Health Services
The California Veterans Health Initiative has distributed $38 million in grants to provide free mental health care to veterans and families in urban and rural areas.
The state operates eight veterans homes across seven counties, providing long-term residential and medical care to more than 1,500 eligible veterans, spouses, and partners.
Claims and Transition Assistance
County Veterans Service Offices statewide helped file 316,000 claims during the 2024-2025 fiscal year, resulting in an estimated $687 million in new or increased federal benefits for California veterans and dependents.
The California Transition Assistance Program (CalTAP), which educates separating service members about available benefits, has served more than 12,000 individuals since 2017 on military installations and college campuses statewide.
Economic Data
A state-commissioned military economic impact study found that defense industries contribute $66 billion annually to California’s economy. The Department of Defense directly employs more than 236,000 people at over 30 federal military installations in the state.
The California Jobs First initiative has designated space, defense, and satellite industries as statewide economic priorities, with workforce programs to translate military training into academic and professional credentials.
