Which states tax military retirement pay? A guide to all 50 states

If you retire from the military, your retired pay follows you wherever you settle, and so does the question of whether your new state wants a share of it. The federal treatment is the same in every state. The state treatment is not: depending on where you live, the state may take nothing, take tax on everything, or land somewhere in between with an exclusion that depends on your age, your other income or even when you served.

I am on active duty in the Air Force, so this question is not abstract for me, and it comes up whenever military families talk about where to go next. For this guide I read what each state's revenue department says about military retirement pay, saved the documents, and built a page for every state that quotes the rule word for word. Below is the whole country in one place, with links to each state's page so you can check the wording yourself. The documents behind the numbers are listed at the end.

One thing up front: this is about state income tax on military retired pay, the pension for service. VA disability compensation is a separate benefit from the Department of Veterans Affairs, and nothing below is about it.

The short answer

Most of the country is friendly to military retirees. 9 states have no income tax at all, 28 more do not tax military retired pay, and 13 tax part of it after an exclusion, a deduction or a credit. Only one jurisdiction, District of Columbia, taxes it with no exclusion we could find. The full table of all 50 states and D.C. sorts them into those groups.

That is a big change from a decade ago. Several states on the exempt list only got there recently, and the documents date it: Arkansas from tax year 2018, West Virginia from 2019, Arizona and Missouri from 2021, Indiana and Oklahoma from 2022, and Rhode Island from 2023. If you last looked at this question years ago, look again.

The 9 states with no income tax

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming do not tax wages or retirement income, so military retired pay is not taxed by the state. These states pay for government in other ways, such as sales and property taxes, which this guide does not cover. Washington is worth watching: its Department of Revenue says a new tax on adjusted gross income over $1 million begins in 2028, which would not touch a typical military retirement.

The 28 income-tax states that do not tax military retired pay

These states have an income tax, but military retirement pay is exempt, excluded or fully deducted. In most of them you still report the income on your return and then subtract it, so the paperwork does not disappear even though the tax does.

Alabama: Alabama lists military retirement pay among the kinds of income exempt from Alabama income tax.
Arizona: From tax year 2021 Arizona excludes retired or retainer pay of the uniformed services from income.
Arkansas: Arkansas stopped taxing military pensions starting with tax year 2018.
Connecticut: Connecticut says military retirement pay is fully exempt from its income tax.
Hawaii: Hawaii does not tax qualifying distributions from employer-funded pensions, and its instructions name military pensions among them.
Illinois: Illinois subtracts federally taxed income from government retirement plans, along with qualified employee plans, IRAs and Social Security. Military retired pay is a government retirement plan payment.
Indiana: For 2022 and later, Indiana's deduction equals the whole amount of military retirement income and survivor's benefits.
Iowa: 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.
Kansas: Kansas lists retirement benefits for service in the U.S. Armed Forces, including the Thrift Savings Plan, among the retirement income it does not tax.
Louisiana: Louisiana excludes federal retirement benefits, military and nonmilitary, and military survivor benefit plan payments.
Maine: Maine fully exempts benefits from a U.S. military retirement plan, survivor benefits included.
Massachusetts: Massachusetts excludes U.S. military pensions from gross income.
Michigan: Michigan subtracts retirement benefits for service in the U.S. Armed Forces, to the extent they are in your AGI.
Minnesota: Minnesota lets you subtract federally taxable military retirement pay under U.S. Code, title 10. If you take it, you cannot also claim the Credit for Past Military Service.
Mississippi: Mississippi generally does not tax retirement income, pensions and annuities once the plan's retirement requirements are met, and military retirement is retirement income.
Missouri: From tax year 2021 Missouri subtracts the taxable military pension from federal adjusted gross income.
Nebraska: Nebraska lets all military retirees exclude 100% of their military retirement benefits, to the extent included in federal AGI.
New Jersey: New Jersey lists U.S. military pensions and survivor's benefit payments among the income it does not tax.
New York: New York says military pension payments to retirees or their beneficiaries are totally exempt from state, New York City and Yonkers income taxes.
North Carolina: for most career retirees. Since 2022 North Carolina lets you deduct military retired pay if you served at least 20 years or were medically retired, and Survivor Benefit Plan payments to your beneficiary qualify too. Shorter careers can still fall under the older Bailey decision if service began early enough.
North Dakota: North Dakota lets retired U.S. armed forces, Reserve and National Guard members, or their surviving spouses, subtract their military retirement benefits.
Ohio: Military retirement pay is deductible on the Ohio Schedule of Adjustments and is not taxed by Ohio.
Oklahoma: From tax year 2022 Oklahoma lets each individual exclude 100% of retirement benefits from any component of the Armed Forces.
Pennsylvania: Pennsylvania lists military pension benefits among the income not taxable for its personal income tax.
Rhode Island: For tax years from 2023, Rhode Island fully exempts military service pensions.
South Carolina: South Carolina lets taxpayers deduct all military retirement income included in South Carolina taxable income, and the deduction extends to a surviving spouse.
West Virginia: Since 2019, West Virginia exempts all military retirement income from the Armed Forces, Reserves, National Guard and the non-military uniformed services.
Wisconsin: Wisconsin exempts payments from the U.S. military retirement system, including the Survivor Benefit Plan.

A few of these have conditions worth reading closely. Iowa counts only retirement pay from the Defense Finance and Accounting Service (DFAS) or a similar source, not pay from the Office of Personnel Management. Minnesota's subtraction is tied to retirement pay under title 10 of the U.S. Code, and taking it means giving up the state's Credit for Past Military Service. Illinois reaches military retired pay through its broader subtraction for government retirement plans rather than a rule written for the military. North Carolina's deduction, in place since 2022, is for retirees who served at least 20 years or were medically retired; a shorter career can still be covered by the older Bailey decision, but only with five years of creditable service by August 12, 1989.

The 13 states that tax part of it

This is where the details live. Each state below excludes or offsets part of your retired pay, and the size of the break ranges from a few thousand dollars to all of it, depending on who you are.

California: For 2025 through 2029, California lets a qualified taxpayer exclude up to $20,000 of military retirement pay or Survivor Benefit Plan annuity payments. The rest is taxed.
Colorado: Under 55, Colorado lets a retired servicemember subtract military retirement benefits up to $15,000 a year (2022 through 2028). At 55 or older, military retirement goes under the regular pension subtraction instead, which has its own limits.
Delaware: Delaware gives retired military under 60 a pension exclusion of up to $12,500, against $2,000 for other pensions at that age. At 60 or older the general exclusion of up to $12,500 of pension and eligible retirement income applies.
Georgia: Under 62, Georgia excludes $17,500 of military retirement income, plus another $17,500 if you have more than $17,500 of earned income in Georgia. From 62, its general retirement exclusion applies.
Idaho: Military retirement pay can qualify for Idaho's retirement benefits deduction. For 2025 Idaho changed who qualifies: a retired servicemember who is disabled, 62 or older, or under 62 and working enough to have to file a federal return. The deduction has a yearly cap that is reduced by Social Security benefits.
Kentucky: Kentucky's pension exclusion of $31,110 covers military retirement pay like other pensions.
Maryland: Maryland lets you subtract up to $20,000 of military retirement income at 55 or older, and up to $12,500 under 55.
Montana: Montana's Working Military Retirement Exemption lets certain resident military retirees who also have income from a job, a business or a farm subtract a portion of their benefits. Residents receiving military survivor benefits can too.
New Mexico: Each armed forces retiree, or surviving spouse of one, can exempt $30,000 of armed forces retirement pay. On a joint return where both qualify, each gets the exemption.
Oregon: Oregon taxes residents' pensions, but its federal pension subtraction covers the share of service before October 1, 1991: all of it if every month of service was before that date, none if no month was.
Utah: Utah does not exclude military retirement pay, but it gives a Military Retirement Credit of 4.5% of the taxable pay, which cannot exceed your tax.
Vermont: Vermont lets retirees below its income thresholds exclude the first $10,000 of military retirement income. You can take only one of its retirement exemptions.
Virginia: Virginia's Military Benefits Subtraction lets you subtract up to $40,000 of eligible military benefits on 2025 and later returns ($30,000 for 2024).

Age changes the answer

In several partial states, the rule changes at a birthday, and the military rule is often more generous to younger retirees than the general pension rule is. That makes sense once you remember that many people retire from the military in their early forties.

Delaware: under 60, a military retiree can exclude up to $12,500, while other pensions get $2,000. At 60 the general exclusion of up to $12,500 of pension and eligible retirement income takes over.
Maryland: up to $12,500 under 55, and up to $20,000 from 55.
Colorado: under 55, the military subtraction is capped at $15,000 for 2022 through 2028. From 55, military retirement goes under the regular pension subtraction, generally $20,000, or $24,000 from 65.
Georgia: under 62, $17,500, plus another $17,500 if you have more than $17,500 of earned income in Georgia. From 62, the general retirement exclusion applies.
Idaho: for 2025, a retired servicemember's pension can qualify for the retirement benefits deduction if they are disabled, 62 or older, or under 62 and working enough to have to file a federal return.

Work after the military can help

Some states reward retirees who start a second career. Georgia's extra $17,500 for those under 62 depends on Georgia earned income, and Montana's Working Military Retirement Exemption applies to resident military retirees who also earn income from a job, a business or a farm. Idaho's new rule for retirees under 62 works the same way. If you plan to work after you retire, those states look different than they do on paper.

When you served can matter

Oregon ties its break to an old court case about federal pensions, so the date of your service decides it. Its federal pension subtraction covers the share of service before October 1, 1991: all of it if every month (or every Reserve and Guard point) was earned before then, none if none was, and a percentage in between. For most people retiring today, that date does not reach back far enough, so plan as if most of the pay is taxed there.

A credit is not an exclusion

Utah does not take military retired pay out of income at all. It taxes it, then gives a Military Retirement Credit of 4.5% of the taxable amount, which cannot exceed your tax. The effect depends on Utah's tax rate, so read the state's worksheet rather than assuming the pay is tax-free.

Income limits and time limits

Vermont's $10,000 exclusion is only for retirees whose income is below the thresholds for its Social Security exemption, and you can claim only one of its retirement exemptions. California's exclusion of up to $20,000 is written for tax years 2025 through 2029, so it ends unless the law is extended. Virginia's subtraction stepped up from $20,000 in 2023 to $30,000 in 2024 and $40,000 from 2025.

The District of Columbia

District of Columbia taxes the taxable part of pensions and annuities in your federal adjusted gross income, and its instructions have no exclusion aimed at military retired pay. The District does have a subtraction for D.C. and federal government survivor benefits for survivors 62 or older; the D.C. pension page quotes it.

Survivor Benefit Plan payments

If you are the surviving spouse receiving a Survivor Benefit Plan annuity, many states extend the same treatment to you. The documents name survivor payments directly for California, Indiana, Louisiana, Maine, New Jersey, New Mexico, North Dakota, South Carolina, Virginia and Wisconsin, among others. Montana's exemption also covers residents receiving military survivor benefits. Where a state is silent, ask the revenue department before assuming survivor payments are treated like the retiree's.

What the numbers look like

Here is a simple illustration using the limits quoted above. Take a retiree with $30,000 of military retired pay a year, filing for 2025, and look only at how much of that pay each state lets them take off the table before state tax is figured:

Virginia: the subtraction goes up to $40,000, so all $30,000 comes out.
New Mexico: the exemption is $30,000 per retiree, so all of it comes out.
Maryland, age 55 or older: up to $20,000 comes out, leaving $10,000 to tax. Under 55, $12,500 comes out, leaving $17,500.
California: up to $20,000 comes out for 2025, leaving $10,000.
Delaware, under 60: $12,500 comes out, leaving $17,500.
Any of the 28 exempt states: all of it comes out.

This is not a tax bill. Each state then applies its own rates, deductions and credits to what is left, and your other income changes the result. It does show why two states that both "partly" tax military retirement can be very different for the same person.

Choosing where to retire: look at the whole picture

Military retired pay is rarely a retiree's only income. A spouse's paycheck or pension, Thrift Savings Plan withdrawals, an IRA and, later, Social Security all have their own state rules. A state that exempts military pay can still tax your TSP and IRA withdrawals, and a state with a generous general retirement exclusion can end up better for a two-income household than one with a narrow military rule. Each state page links to that state's rules on other retirement income and to its rules on Social Security.

Before you commit to a state, it is worth working through a short list:

Read your state's military page and the document it links to, not just the group it sits in.
Note any age in the rule, and what changes when you reach it.
Check whether the rule depends on other income, earned income, or an income limit.
Check what happens to TSP, IRA and spouse retirement income in the same state.
If a surviving spouse may one day receive Survivor Benefit Plan payments, check how the state treats them.
Look at the tax year in the document. Several of these rules were phased in or are written to expire.

Legal residence and the move itself

While you are on active duty, your state of legal residence usually decides where your military pay is taxed, wherever you are stationed. Retired pay is different: once you retire, the state you actually make your home in is the one whose rules apply. If you are moving at retirement, the year of the move can involve part-year returns in two states, and each state's rules for part-year residents decide how the income is split. Each state's instructions cover this, and it is a good question to settle before your last move rather than after.

How we read the rules

Every state page on this site quotes the revenue department's own words and links to the document we saved, with the date we read it. Where a state did not mention military pay specifically, we said so and used its general pension rule. Where a page carried two rules at once, as Arizona's does with an older $3,500 subtraction alongside its newer full exclusion, the state page notes it. State law changes, often at the start of a tax year, so check the date on the page and confirm with the state before you file or move.