Does Iowa tax military retirement pay?
Not taxed
No. Iowa exempts retirement pay for service in the Armed Forces, Reserve or National Guard, at any age. Only pay from DFAS or a similar source counts.
In the state's own words
Copied word for word from the official document linked below each quote:
“Retirement pay for military service in the United States Armed Forces, the Armed Forces Military Reserve, or the National Guard is eligible for exemption from Iowa income tax and is not included on line 9, without regard for age or disability.”
“Only military retirement pay received from the Defense Finance and Accounting Service (DFAS), or a similar source, is eligible for the exemption.”
Other retirement income in Iowa
No, from age 55. Since 2023 Iowa excludes retirement income from Iowa taxable income for taxpayers who are 55 or older, disabled, or certain survivors. The Iowa pension page has the details, and the Iowa Social Security page covers Social Security. No. Iowa does not tax Social Security. Some benefits still count when Iowa decides whether you have enough income to have to file.
Before you file or move
This page is about state income tax only. Your federal return has its own rules for military retired pay, and VA disability compensation is a separate benefit from retired pay. State rules change, and the details (age, years, which kinds of pay qualify, survivor benefits) matter. Check with the Iowa Department of Revenue before you file or move.
Other states in the same group
Check our work
The answer above comes from this document. Follow the link and compare.
- IA 1040 Expanded Instructions (document dated February 20, 2023)Iowa Department of Revenue. Read on November 13, 2026.