States That Don’t Tax Military Retirement Pay

Updated: January 5, 2024
In this Article

    Here’s your 2024 list of all 50 states that exempt (or don’t exempt) military retirement pay. Depending on the state, you may pay no income tax, or you may find your military retirement pay exempt from taxation up to a certain dollar amount.

    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 
    • 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 homebuying benefit. Prequalify today!

    See What You Qualify For

    Select a VA Home Loan Option to Continue:

    Home Purchase
    Home Refinance
    Cash-Out Refinance
    Explore My Options
    Get Started

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

    • Alabama
    • Arizona
    • Arkansas
    • Hawaii
    • Illinois
    • Indiana
    • Iowa
    • Kansas
    • Louisiana
    • Maine
    • Massachusetts
    • Michigan
    • Mississippi
    • Missouri
    • Nebraska 
    • New Jersey
    • New York
    • North Carolina
    • North Dakota
    • Ohio
    • Oklahoma
    • Pennsylvania
    • Rhode Island
    • South Carolina
    • West Virginia
    • Wisconsin

    Military retirees living in these states are encouraged to visit the Defense Finance and Accounting Service website to change their income tax withholding to zero.

    States That Fully Tax Military Retirement Pay

    As of 2024, California and the District of Columbia (Washington, D.C.) are the only locations with no exemption for military retirement pay, which means military retirement pay is taxed at the standard state income tax rate. 

    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 below 60 may exclude up to $2,000 of military retirement pay. Military retirees aged 60 or older can 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 below 62 may qualify for an exemption of $17,500 or above, depending on their income level. Taxpayers 62 or older or permanently disabled, regardless of age, may be eligible for a retirement income adjustment on their Georgia tax return. Taxpayers age 62 to 64 may qualify for an exemption on military retirement pay up to $35,000, while those 65 and older can be eligible for an exemption up to $65,000. 
    • Idaho – Up to $41,140 of qualified retirement benefits (including military retirement pay) may be exempt for single filers 65 or older. 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 before 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 55 who are totally disabled or have a spouse who is disabled can receive up to $15,000. Tax deductions may vary from year to year. 
    • Minnesota – Minnesota offers a military retirement pay exemption or the ability to claim credit for past military service. Requirements for each option vary, so verify your eligibility with the Montana Department of Revenue. 
    • Montana – Allows a partial military retirement pay exemption depending on your income level and other stipulations. 
    • New Mexico – Allows a military retirement exemption of $20,000 in 2023. For years 2024 to 2026, up to $30,000 of military retirement pay may be exempt. 
    • Oregon – Military retirement pay earned before October 1, 1991, is exempt from income tax. Any income earned after that date will have their military retirement pay taxed as regular income.
    • Utah – Utah offers a credit for Military Retirees. You can multiply your taxable income by 0.0485 to calculate your specific credit amount. For more information, contact the Utah State Tax Commission. 
    • Vermont  – If you make less than $50,000, you may exempt $10,000 of your military retirement income. 
    • Virginia – Virginia allows a deduction of $20,000 of retired military pay for the 2023 tax year and $20,000 for the 2024 tax year. For 2025 and later, $30,000 of eligible military benefits may be deducted. 

    See veterans benefits for all 50 states.

    Tax codes vary from state to state, and 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.

    Written by Team