26 U.S.C. § 122 - Certain reduced uniformed services retirement pay

• Cite as: 26 U.S.C. § 122

(a) General rule

In the case of a member or former member of the uniformed services of the United States, gross income does not include the amount of any reduction in his retired or retainer pay pursuant to the provisions of chapter 73 of title 10, United States Code.

(b) Special rule

(1) Amount excluded from gross income

In the case of any individual referred to in subsection (a), all amounts received as retired or retainer pay shall be excluded from gross income until there has been so excluded an amount equal to the consideration for the contract. The preceding sentence shall apply only to the extent that the amounts received would, but for such sentence, be includible in gross income.

(2) Consideration for the contract

For purposes of paragraph (1) and section 72(n), the term "consideration for the contract" means, in respect of any individual, the sum of-

(A) the total amount of the reductions before January 1, 1966, in his retired or retainer pay by reason of an election under chapter 73 of title 10 of the United States Code, and

(B) any amounts deposited at any time by him pursuant to section 1438 or 1452(d) of such title 10.

Cite as 26 U.S.C. § 122

Source: Added Pub. L. 89-365, §1(a)(1), Mar. 8, 1966, 80 Stat. 32; amended Pub. L. 93-406, title II, §§2005(c)(10), 2007 (1), Sept. 2, 1974, 88 Stat. 992, 994; Pub. L. 113-295, div. A, title II, §221(a)(21), Dec. 19, 2014, 128 Stat. 4040.

Notes from the Office of Law Revision Counsel

current through 11/8/2021

EDITORIAL NOTES

PRIOR PROVISIONS

A prior section 122 was renumbered section 140 of this title.

AMENDMENTS

2014-Subsec. (b)(1). Pub. L. 113-295 struck out "after December 31, 1965," after "all amounts received".

1974-Subsec. (a). Pub. L. 93-406, §2007(a), substituted "United States, gross income does not include the amount of any reduction in his retired or retainer pay pursuant to the provisions of chapter 73 of title 10, United States Code" for "United States who has made an election under chapter 73 of title 10 of the United States Code to receive a reduced amount of retired or retainer pay, gross income does not include the amount of any reduction after December 31, 1965, in his retired or retainer pay by reason of such election".