RTC §17132.4: (a) For taxable years beginning on or after January 1, 2005, gross income does not include the death benefits received by an eligible individual.

(a) For taxable years beginning on or after January 1, 2005, gross income does not include the death benefits received by an eligible individual. (b) For purposes of this section: (1) “Death benefit” means the entire amount of the death benefit payment made pursuant to Chapter 3.5 (commencing with Section 850) of Division 4 of the Military and Veterans Code. (2) “Eligible individual” means the surviving spouse of, or a beneficiary designated by, any member of the California National Guard, State Guard, or Naval Militia who dies or is killed in the performance of duty, as provided in Section 850 of the Military and Veterans Code.