From the Web site, Military.com

Not all military personnel may be aware of the new law which allows retirees and veterans to salute the flag at ceremonial events. The below information is gleaned from the Military.com web site (also provided as a link a the bottom of this page):

* Traditionally, members of the nation's veterans service organization have rendered the hand-salute during the national anthem and at events involving the national flag ONLY while wearing the organization's official head-gear.

* The National Defense Authorization Act of 2008 contained an amendment to allow non-uniformed service members, military retirees, and veterans to render a hand salute during the hoisting, lowering, or passing of the U.S. flag.

* A later amendment further authorized hand-salutes during the national anthem by veterans and out-of-uniform military personnel. The was included in the Defense Authorization Act of 2009, signed by President George W. Bush on October 14, 2008.

* For complete wording, link to "SEC. 595. MILITARY SALUTE FOR THE FLAG DURING THE NATIONAL ANTHEM BY MEMBERS OF THE ARMED FORCES NOT IN UNIFORM AND BY VETERANS" on the Military.com web site.