State Tax Breaks Available for Military and Retirees
You may know that military allowances like Basic Allowance for Housing are tax-free. You may also know that most VA benefits are also tax-free.
State Tax Breaks Available for Military and Retirees
You may know that military allowances like Basic Allowance for Housing are tax-free. You may also know that most VA benefits are also tax-free.
Did you know that many states do not charge income tax on active duty or retired military pay? Many others tax only a portion of these pays.
To see what type of tax breaks your state offers for military members, retirees and survivors check out our list.
Alabama
- Military income: Follows federal rules
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Tax-free
- Alabama Department of Revenue
Alaska
Arizona
- Military income: Tax-free
- Retired pay: Tax-free
- Survivor Benefit Plan: Same as retired pay
- Social Security: Tax-free
- Arizona Department of Revenue
Arkansas
California
- Military income: Military pay is taxable if stationed in California
- Retired pay: Follows federal tax rules
- Survivor Benefit Plan: Follows federal tax rules
- Social Security: Tax-free
- California Franchise Tax Board
Colorado
-
Military income: Tax-free if stationed OCONUS and you spend at least 305 days outside the U.S. during the tax year. Accompanying spouse is also eligible as long as they spend at least 305 days outside the U.S
-
Retired pay: Retirees under age 55 can exclude up to $10,000 income from their taxable income, those 55 – 64 can exclude up to $20,000, at age 65 that amount increases to $24,000
- Survivor Benefit Plan: Same as retired pay
- Social Security: Taxable
- Colorado Department of Revenue
Connecticut
- Military income: If you are stationed outside of the state your military income is tax-free if you don’t own a home in Connecticut or visit for more than 30 days.
- Retired pay: Tax-free.
- Survivor Benefit Plan: Tax-free
- Social Security: Taxable
- Connecticut Department of Revenue Services
Delaware
- Military income: Follows federal tax rules
- Retired pay: Up to $12,500 of military retirement excluded for individuals under age 60
- Survivor Benefit Plan: Same as retired pay
- Social Security: Tax-free
- Delaware Division of Revenue
District of Columbia
- Military income: Follows federal tax rules
- Retired pay: Follows federal tax rules
- Survivor Benefit Plan: Follows federal tax rules
- Social Security: Tax-free
- DC Office of Tax and Revenue
Florida
Georgia
- Military income: Follows federal tax rules
- Retired pay: Taxpayers over 62 or permanently disabled may be eligible for an exclusion of retired pay
- Survivor Benefit Plan: Same as retired pay
- Social Security: Tax-free
- Georgia Department of Revenue
Hawaii
- Military income: Follows federal tax rules
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Tax-free
- Hawaii Department of Taxation
Idaho
- Military income: Tax-free if stationed out-of-state
- Retired pay: Tax free for for retirees over 65, disabled retirees over 62.
- Survivor Benefit Plan: Same as retired pay
- Social Security: Tax-free
- Idaho State Tax Commission
Illinois
Indiana
- Military income: Tax-free starting with 2023 taxes
- Retired pay: Tax-free
- Survivor Benefit Plan: Same as retired pay
- Social Security: Tax-free
- Indiana Department of Revenue
Iowa
- Military income: Tax-free
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Tax-free
- Iowa Department of Revenue
Kansas
- Military income: Follows federal tax rules
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Taxable
- Kansas Department of Revenue
Kentucky
- Military income: Tax-free
- Retired pay: Up to $31,110 is tax-free, you may be able to exclude more in some situations
- Survivor Benefit Plan: Same as retired pay
- Social Security: Tax-free
- Kentucky Department of Revenue
Louisiana
- Military income: Beginning in 2022 up to $50,000 is tax-free if stationed out-of-state for 120 or more consecutive days
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Tax-free
- Louisiana Department of Revenue
Maine
- Military income: Military income earned out-of-state is tax-free
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Tax-free
- Maine Revenue Services
Maryland
- Military income: If your total income is less than $30,000 you can deduct up to $15,000 of military pay if stationed OCONUS
- Retired pay: The first $12,500 is tax-free starting with the 2023 tax year. That amount increases to $20,000 for those 55 or older
- Survivor Benefit Plan: Same as retired pay
- Social Security: Tax-free
- Comptroller of Maryland
Massachusetts
Michigan
Minnesota
- Military income: Tax-free
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: The maximum subtraction for 2022 is $5,450 for married joint filers, $2,725 for married separate filers, and $4,260 for single and head-of-household filers.
- Minnesota Department of Revenue
Mississippi
Missouri
Montana
- Military income: Tax-free
- Retired pay: Up to $4,640 is exempt if gross income is less than $38,660. Starting with the 2024 tax year, Montana will exempt from state income tax up to half of military retirement pay for up to five years after a retiree becomes a Montana resident or starts to receive retirement pay
- Survivor Benefit Plan: Follows federal tax rules
- Social Security: Taxable
- Montana Department of Revenue
Nebraska
- Military income: Follows federal tax rules
- Retired pay: Tax-free
- Survivor Benefit Plan: Follows federal tax rules
- Social Security: Taxable
- Nebraska Department of Revenue
Nevada
New Hampshire
New Jersey
- Military income: Taxable, except combat pay for Tax Year 2021 and later.
- Veteran deduction: Honorably discharged veterans qualify for a one-time $6,000 tax deduction in the year they are discharged from active duty
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Tax-free
- New Jersey Division of Taxation
New Mexico
- Military income: Tax-free
- Retired pay: Follows federal tax rules
- Survivor Benefit Plan: In 2022, up to $10,000 of military retirement is tax-free. That amount increases to $20,000 in 2023 and $30,000 in 2024
- Social Security: Same as retired pay
- New Mexico Taxation and Revenue Department
New York
- Military income: Tax-free if you: 1) did not maintain any permanent home in New York; 2) maintained a permanent home outside New York during the entire year (barracks, bachelor officers´ quarters or shipboard don’t qualify.); 3) spent less than 30 days in New York during tax year. It also is tax-free if you were in a foreign country for at least 450 days during any period of 548 consecutive days
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Tax-free
- New York Department of Taxation and Finance
North Carolina
North Dakota
- Military income: Follows federal rules for 2022 tax year. Will be tax-free starting in the 2023 tax year.
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Tax-free
- North Dakota State Tax Commissioner
Ohio
- Military income: Tax-free if stationed outside Ohio
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Tax-free
- Ohio Department of Taxation
Oklahoma
- Military income: Tax-free
- Retired pay: Beginning in 2022 retirement pay is tax-free
- Survivor Benefit Plan: Same as retired pay
- Social Security: Tax-free
- Oklahoma Tax Commission
Oregon
- Military income: All active duty pay earned out-of-state is tax-free, up to $6,000 of active-duty pay earned in Oregon is also tax-free
- Retired pay: If you had military service before Oct. 1, 1991 you may be able to deduct a portion of your retirement pay. If you didn’t have military or federal service prior to Oct. 1, 1991, your military retirement is taxed normally
- Survivor Benefit Plan: Same as retired pay
- Social Security: Tax-free
- Oregon Department of Revenue
Pennsylvania
Rhode Island
- Military income: Follows federal tax rules
- Retired pay: Effective in 2022, military retirement is tax-free
- Survivor Benefit Plan: Same as retired pay
- Social Security: Taxable
- Rhode Island Department of Revenue
South Carolina
- Military income: Active duty pay is taxable. Reserve & National Guard drill pay is not taxable
- Retired pay: Effective in 2022, military retirement is tax-free.
- Survivor Benefit Plan: Same as retired pay
- Social Security: Tax-free
- South Carolina Department of Revenue
South Dakota
Tennessee
Texas
Utah
- Military income: Follows federal tax rules
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Taxable
- Utah State Tax Commission
Vermont
- Military income: Active duty military pay earned outside Vermont is tax-free.
- Retired pay: Beginning in 2022, up to $10,000 in retirement income is tax-free for those with a gross income less than $50,000 for single filers or $65,000 for joint filers.
- Survivor Benefit Plan: Follows federal tax rules
- Social Security: Taxable
- Vermont Department of Taxes
Virginia
- Military income: Up to $15,000 of military basic pay received during the taxable year may be exempted from Virginia income tax. For every $1.00 of income over $15,000, the maximum subtraction is reduced by $1.00. For example, if your basic pay is $16,000, you are entitled to deduct only $14,000. You are not eligible for the subtraction if your military basic pay is $30,000 or more. For VA National Guard, up to 39 calendar days of service or $3,000 (whichever is less) may be deducted from your income when filing. This deduction is only available for O-3 and below.
- Retired pay: In 2022, up to $10,000 of retirement pay is tax-free for retirees 55 and older. That amount increases by $10,000 each year until 2025, when up to $40,000 is deductible. Starting with the 2024 tax year, the age limit will no longer apply
- Survivor Benefit Plan: Same as retired pay.
- Social Security: Tax-free
- Virginia Tax Website
Washington
West Virginia
Wisconsin
- Military income: Follows federal tax rules
- Retired pay: Tax-free
- Survivor Benefit Plan: Tax-free
- Social Security: Tax-free
- Wisconsin Department of Revenue
Wyoming
U.S. Territories & Possessions
Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Virgin Islands and Puerto Rico have their own independent tax departments. If you have income from one of these possessions, you may have to file a U.S. tax return only, a possession tax return only, or both returns. This generally depends on whether you are considered a resident of one of the possessions. In some cases, you may have to file a U.S. return, but be able to exclude income earned in a possession from U.S. tax. For more information, see the IRS International Taxpayer page.
American Samoa
| Tax Division Government of American Samoa |
| Pago Pago, American Samoa 96799 |
Commonwealth of the Northern Mariana Islands
| Division of Revenue and Taxation |
| Commonwealth of the Northern Mariana Islands |
| P. O. Box 5234, CHRB |
| Saipan, MP 96950 |
Guam
| Department of Revenue and Taxation |
| Government of Guam |
| P.O. Box 23607 |
| GMF, GU 96921 |
| Phone: 671-472-7471 |
Puerto Rico
| Negociado de Asistencia |
| Contributiva y Legislación |
| Departamento de Hacienda |
| P.O. Box 565 |
| San Juan, Puerto Rico 00902-6265 |
| Phone: 787-721-2020, ext. 3611 |
Virgin Islands
| Virgin Islands Bureau of Internal Revenue |
| 9601 Estate Thomas |
| Charlotte Amalie |
| St. Thomas, U.S. Virgin Islands 00802 |
| Phone: 340-774-5865 |
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