Does Michigan tax military retirement pay?
Not taxed
No. Michigan subtracts retirement benefits for service in the U.S. Armed Forces, to the extent they are in your AGI.
In the state's own words
Copied word for word from the official document linked below each quote:
“Compensation and retirement benefits received for services in the U.S. Armed Forces to the extent included in AGI; do not deduct compensation received from the U.S. Public Health Service.”
Other retirement income in Michigan
Partly, and growing. Michigan is phasing back in its retirement and pension subtraction: up to 75% of the limit for 2025 and up to 100% from 2026, based on private pension limits. The Michigan pension page has the details, and the Michigan Social Security page covers Social Security. No. Michigan lists Social Security, to the extent it is in your federal adjusted gross income, among its subtractions.
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 Michigan Department of Treasury 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.
- Retirement and pension benefits: additions and subtractionsMichigan Department of Treasury. Read on November 13, 2026.