# § 122. Certain reduced uniformed services retirement pay
**(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.
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**Source Credit**: (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(a), (b)(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.)
## Editorial Notes
### Prior Provisions
A prior section 122 was renumbered .
### Amendments
2014—Subsec. (b)(1). struck out “after ,” after “all amounts received”.
1974—Subsec. (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 , in his retired or retainer pay by reason of such election”.
Subsec. (b)(2). , substituted “72(n)” for “72()”.
Subsec. (b)(2)(B). , inserted reference to .
## Statutory Notes and Related Subsidiaries
### Effective Date of 2014 Amendment
Amendment by effective , subject to a savings provision, see , set out as a note under .
### Effective Date of 1974 Amendment
Amendment by applicable only with respect to distributions or payments made after , in taxable years beginning after , see , set out as a note under .
> “The amendments made by this section [amending this section and sections 72, 101, and 2039 of this title] apply to taxable years ending on or after
>
> . The amendments made by paragraphs (3) and (4) of subsection (b) [amending sections 101 and 2039 of this title] apply with respect to individuals dying on or after such date”.
, , , provided that:
### Effective Date
> “The amendments made by subsections (a) and (b) [enacting this section and amending
>
> ] shall apply with respect to taxable years ending after
>
> . The amendment made by subsection (c) [amending
>
> ] shall apply with respect to individuals making an election under chapter 73 of title 10 of the United States Code who die after
>
> .”
, , , provided that: