• Home
  • Military Discounts
    • Military & Veteran Discount List
    • Local Military and Veterans Discounts
    • Apple Military Discount
    • Veteran & Military Cell Phone Discounts
    • Gym and Health Club Discounts
  • Benefits
    • 10 Veterans Benefits You May Not Know About
    • Top Military Spouse Benefits
    • Medal of Honor: Benefits, History and Facts
    • Purple Heart Benefits
    • Veterans Health A to Z
  • Housing & Home Ownership
    • VA Loan Calculator
    • VA Loan Limits by County
    • VA Home Loan Guide
    • 5 Benefits of a VA Loan
    • 2022 BAH Rates
    • BAH Calculator
  • Money & Finance
    • 2022 Military Pay Charts
    • 2022 Defense Budget
    • 2022 Military Pay
    • 2022 Military Pay Charts
    • COLA Watch 2022-2023
    • Military Pay Calculator
    • Military Pay Dates
    • VA Disability Rates
  • Jobs
    • Veteran Friendly Employers
    • Military Spouse Employment Preference
    • Veterans Employment and Training Service (VETS)
    • Security Clearance Jobs After the Military
  • Education
    • Veteran Friendly Colleges
    • Online Colleges with Military Discounts
    • Veteran Friendly Colleges Guide
    • Military Spouse Career Advancement Accounts (MyCAA)
    • Monthly Housing Allowance (MHA) for the GI Bill
    • Forever GI Bill
  • Resources
    • How to Get a Veterans ID Card
    • Veterans ID on Driver’s License or ID Card by State
    • Military ID Cards
    • Military Calendar
    • State Veteran’s Benefits
Home » States That Don’t Tax Military Retirement Pay

States That Don’t Tax Military Retirement Pay

Here’s your 2022 list of all 50 states that exempt (or don’t exempt) military retirement pay. The laws differ depending on which of the 50 states you live in and some state tax laws are more complex than others. Depending on the state, you may pay no income tax whatsoever, or you may find your military retirement pay is exempt from taxation up to a certain dollar amount.

Quick math: nine states don’t have a personal income tax, three states fully tax military retirement pay, 25 states don’t tax retirement pay and 13 tax a portion of it.

States That Don’t Tax Personal Income

The following states don’t require military members to pay state income tax on military retirement pay because there is simply no state income tax collected:

  • Alaska
  • Florida
  • Nevada
  • New Hampshire (dividend and interest taxes only)
  • South Dakota
  • Tennessee (dividend and interest taxes only but will be phased out in 2021)
  • Texas
  • Washington
  • Wyoming

{Sponsored} Veterans Can Buy a Home with $0 Down
The VA Home Loan offers $0 Down with no PMI. Find out if you’re eligible for this powerful home buying benefit. Prequalify today!

States That Don’t Tax Military Retirement Pay (But Have State Income Tax)

  • Arizona
  • Alabama
  • Arkansas
  • Connecticut
  • Hawaii
  • Illinois
  • Indiana (effective Jan. 1, 2022)
  • Iowa
  • Kansas
  • Louisiana
  • Maine
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • New Jersey
  • New York
  • North Carolina
  • North Dakota
  • Ohio
  • Pennsylvania
  • Utah (effective Jan. 1, 2021)
  • West Virginia
  • Wisconsin

For these states military retirees are encouraged to go to www.dfas.mil/retiredmilitary to change their income tax withholding to zero.


States That Fully Tax Military Retirement Pay

The following states have no specific state income tax exemption for military retirement pay:

  • California
  • Vermont
  • Virginia

States With Other Special Tax Provisions for Military Retirement Pay

  • Colorado – Depending on age, up to $24,000 of military retirement pay may be exempt from state taxes.
  • Delaware – Taxpayers up to the age of 60 may exclude up to $2,000 of military retirement pay, military retirees aged 60 or older exclude up to $12,500.
  • District of Colombia – Military retirement pay may be excluded from state taxation up to $3,000 for individuals 62 or older.
  • Georgia – Georgia has a provision for any retirement income including military retirement pay. Taxpayers who are 62 or older, or permanently and totally disabled regardless of age, may be eligible for a retirement income adjustment on their Georgia tax return. Up to $35,000 ages 62-64 and $65,000 for 65 and older.
  • Idaho – Up to $34,332 of qualified retirement benefits (including military retirement pay) may be exempt for single filers (up to $51,498 for joint filers) 65 or older, or disabled and age 62 or older are excluded from state taxes. Such deductions must be reduced by retirement benefits paid under the Federal Social Security Act or the Tier 1 Federal Railroad Retirement Act. The total maximum deductions vary each year.
  • Kentucky – All military retirement pay is exempt from state income tax for those who retired prior to 1997. For those who retired after 1997, military retirement pay is subject to state tax when the pay exceeds $31,110.
  • Maryland – Military retirees don’t pay state income taxes on the first $5,000 of their retirement income. Those over age 65, or who are totally disabled, or who have a spouse who is totally disabled, receive additional state income tax breaks which may vary from year to year.
  • Montana – Starts with a graduated system with income below $36,420 (single filer); Once income exceeds $36,420, 85 percent of Social Security benefits will be taxed.
  • New Mexico – Low-income taxpayers 65 and older may exempt up to $8,000 of income and gradually phases out at $28,500 (single filer) or $51,000 (filing jointly. All income is exempt for taxpayers who are 100 or older.
  • Oklahoma – Military retirement pay is exempt either up to 75% or $10,000, whichever is greater, but cannot exceed federal adjusted gross income.
  • Oregon – Military retirees may qualify for a “federal pension subtraction”. Those considered “special-case” Oregon residents will have their military retirement pay taxed as regular income.
  • Rhode Island –  Up to $15,000 of retirement income is exempt for retirees who have reached their full Social Security retirement age and whose federal AGI is less than $83,450 for single taxpayers or $104,350 for married people filing jointly.
  • South Carolina – Military retirees with a minimum of 20 years of active duty may exempt up to $3,000 until age 65, after which an exemption of $10,000 applies.

See veterans benefits for all 50 states.

Tax codes vary from state to state, and tax laws are subject to change due to a variety of factors. Always consult with a tax professional to learn the most recent updates to state tax code, especially if there are changes to your tax bracket, income status, or benefits.


Related Articles
COLA Increase Watch Money & Finance
VA Disability Rates States That Don’t Tax Social Security Benefits
VA Loan Calculator Best States with Veterans Benefits

Military + Veteran Discounts

Want 30+ Mil/Vet discounts to use today? Enter your email for updates and we'll send it!
Name(Required)

Popular Articles

2022 VA Disability Rates

2022 Military Pay

Military Pay Calculator

VA Loan Calculator

2022 BAH Rates

Search Veteran.com

Military Benefits Logo

Company

  • About
  • Contact Us
  • Add a Discount
  • Privacy Policy
  • Terms of Use
  • Disclosure
  • Unsubscribe

Quick Links

  • Home
  • Military Discounts
  • Benefits
  • Housing & Ownership
  • Money & Finance
  • Employment
  • Education
  • Resources

Connect With Us

  • facebook
  • instagram
  • pinterest
  • twitter
  • youtube
Copyright © 2022 Three Creeks Media, LLC

Veteran.com is a property of Three Creeks Media. Neither Veteran.com nor Three Creeks Media are associated with or endorsed by the U.S. Departments of Defense or Veterans Affairs. The content on Veteran.com is produced by Three Creeks Media, its partners, affiliates and contractors, any opinions or statements on Veteran.com should not be attributed to the Dept. of Veterans Affairs , the Dept. of Defense or any governmental entity. If you have questions about Veteran programs offered through or by the Dept. of Veterans Affairs, please visit their website at va.gov. The content offered on Veteran.com is for general informational purposes only and may not be relevant to any consumer’s specific situation, this content should not be construed as legal or financial advice. If you have questions of a specific nature consider consulting a financial professional, accountant or attorney to discuss. References to third-party products, rates and offers may change without notice.

Advertising Notice: Veteran.com and Three Creeks Media, its parent and affiliate companies, may receive compensation through advertising placements on Veteran.com; For any rankings or lists on this site, Veteran.com may receive compensation from the companies being ranked and this compensation may affect how, where and in what order products and companies appear in the rankings and lists. If a ranking or list has a company noted to be a “partner” the indicated company is a corporate affiliate of Veteran.com. No tables, rankings or lists are fully comprehensive and do not include all companies or available products.

Editorial Disclosure: Editorial content on Veteran.com may include opinions. Any opinions are those of the author alone, and not those of an advertiser to the site nor of Veteran.com.