Introduction
The vast majority of states do not tax any military retirement pay, and roughly one quarter of the remaining states have limitations in place with regard to what military retirement pay is taxable. The United States Military offers a lifelong monthly annuity payment for military personnel who served for more than twenty years. This retirement plan, in comparison with other retirement plans offered to other portions of the U.S. population, is fairly generous.
How the state taxes military retirement directly affects the sum that retirees are allotted each month throughout the year. In 2022, there are only four states, including Washington D.C., that fully tax military retirement pay. Half of the states in the U.S. have a state income tax but do not tax any military retirement pay.
For the states that do tax military retirement benefits, many of them allow for a certain sum of their allotted benefits to remain untaxed. The amount of untaxed retirement pay ranges widely depending on in what state a person is living. Certain states only allow up to $2,000 to be tax exempt, dependent upon age, while others permit deductions up to $30,000 or more per year.
Scroll through the charts to learn more about how states tax military retirement.
| State | Military Retirement Tax Status | Income Tax Rate | Tax on Pensions | Tax on Social Security |
|---|---|---|---|---|
| Alabama | No Tax | 2% | No | No |
| Alaska | No Tax | 0% | No | No |
| Arizona | No Tax | 2.59% | Yes | No |
| Arkansas | No Tax | 2% | Yes | No |
| Connecticut | No Tax | 3% | Yes | Yes |
| Florida | No Tax | 0% | No | No |
| Hawaii | No Tax | 1.4% | No | No |
| Illinois | No Tax | 4.95% | No | No |
| Indiana | No Tax | 3.23% | Yes | No |
| Iowa | No Tax | 0.33% | Yes | No |
| Kansas | No Tax | 3.1% | Yes | Yes |
| Louisiana | No Tax | 1.85% | Yes | No |
| Maine | No Tax | 5.8% | Yes | No |
| Massachusetts | No Tax | 5% | Yes | No |
| Michigan | No Tax | 4.25% | Yes | No |
| Minnesota | No Tax | 5.35% | Yes | Yes |
| Mississippi | No Tax | 4% | No | No |
| Missouri | No Tax | 1.5% | Yes | No |
| Nebraska | No Tax | 2.46% | Yes | Yes |
| Nevada | No Tax | 0% | No | No |
| New Hampshire | No Tax | 5% | No | No |
| New Jersey | No Tax | 1.4% | Yes | No |
| New York | No Tax | 4% | Yes | No |
| North Carolina | No Tax | 4.99% | Yes | No |
| North Dakota | No Tax | 1.1% | Yes | Yes |
| Ohio | No Tax | 2.77% | Yes | No |
| Pennsylvania | No Tax | 3.07% | No | No |
| South Dakota | No Tax | 0% | No | No |
| Tennessee | No Tax | 0% | No | No |
| Texas | No Tax | 0% | No | No |
| Utah | No Tax | 4.95% | Yes | Yes |
| Washington | No Tax | 7% | No | No |
| West Virginia | No Tax | 3% | Yes | Yes |
| Wisconsin | No Tax | 3.54% | Yes | No |
| Wyoming | No Tax | 0% | No | No |
| Colorado | Partial Exemptions | 4.55% | Yes | Yes |
| Delaware | Partial Exemptions | 2.2% | Yes | No |
| Georgia | Partial Exemptions | 1% | Yes | No |
| Idaho | Partial Exemptions | 1% | Yes | No |
| Kentucky | Partial Exemptions | 5% | Yes | No |
| Maryland | Partial Exemptions | 2% | Yes | No |
| Montana | Partial Exemptions | 1% | Yes | Yes |
| New Mexico | Partial Exemptions | 1.7% | Yes | Yes |
| Oklahoma | Partial Exemptions | 0.25% | Yes | No |
| Oregon | Partial Exemptions | 4.75% | Yes | No |
| Rhode Island | Partial Exemptions | 3.75% | Yes | Yes |
| South Carolina | Partial Exemptions | 0% | Yes | No |
| California | Fully Tax | 1% | Yes | No |
| Vermont | Fully Tax | 3.35% | Yes | Yes |
| Virginia | Fully Tax | 2% | Yes | No |
Military Retirement Tax Status by State
Alabama
Military Retirement Tax Status
No Tax
Ranked in the US
#28
Alaska
Military Retirement Tax Status
No Tax
Ranked in the US
#44
Arizona
Military Retirement Tax Status
No Tax
2.59%
Ranked in the US
#25
Arkansas
Military Retirement Tax Status
No Tax
Ranked in the US
#29
California
Military Retirement Tax Status
Fully Tax
Ranked in the US
#38
Colorado
Military Retirement Tax Status
Partial Exemptions
4.55%
Ranked in the US
#11
Connecticut
Military Retirement Tax Status
No Tax
Ranked in the US
#22
Delaware
Military Retirement Tax Status
Partial Exemptions
2.2%
Ranked in the US
#27
Florida
Military Retirement Tax Status
No Tax
Ranked in the US
#45
Georgia
Military Retirement Tax Status
Partial Exemptions
Ranked in the US
#39
Hawaii
Military Retirement Tax Status
No Tax
1.4%
Ranked in the US
#35
Idaho
Military Retirement Tax Status
Partial Exemptions
Ranked in the US
#40
Illinois
Military Retirement Tax Status
No Tax
4.95%
Ranked in the US
#8
Indiana
Military Retirement Tax Status
No Tax
3.23%
Ranked in the US
#19
Iowa
Military Retirement Tax Status
No Tax
0.33%
Ranked in the US
#42
Kansas
Military Retirement Tax Status
No Tax
3.1%
Ranked in the US
#20
Kentucky
Military Retirement Tax Status
Partial Exemptions
Ranked in the US
#4
Louisiana
Military Retirement Tax Status
No Tax
1.85%
Ranked in the US
#32
Maine
Military Retirement Tax Status
No Tax
5.8%
Ranked in the US
#2
Maryland
Military Retirement Tax Status
Partial Exemptions
Ranked in the US
#30
Massachusetts
Military Retirement Tax Status
No Tax
Ranked in the US
#5
Michigan
Military Retirement Tax Status
No Tax
4.25%
Ranked in the US
#12
Minnesota
Military Retirement Tax Status
No Tax
5.35%
Ranked in the US
#3
Mississippi
Military Retirement Tax Status
No Tax
Ranked in the US
#14
Missouri
Military Retirement Tax Status
No Tax
1.5%
Ranked in the US
#34
Montana
Military Retirement Tax Status
Partial Exemptions
Ranked in the US
#41
Nebraska
Military Retirement Tax Status
No Tax
2.46%
Ranked in the US
#26
Nevada
Military Retirement Tax Status
No Tax
Ranked in the US
#46
New Hampshire
Military Retirement Tax Status
No Tax
Ranked in the US
#6
New Jersey
Military Retirement Tax Status
No Tax
1.4%
Ranked in the US
#36
New Mexico
Military Retirement Tax Status
Partial Exemptions
1.7%
Ranked in the US
#33
New York
Military Retirement Tax Status
No Tax
Ranked in the US
#15
North Carolina
Military Retirement Tax Status
No Tax
4.99%
Ranked in the US
#7
North Dakota
Military Retirement Tax Status
No Tax
1.1%
Ranked in the US
#37
Ohio
Military Retirement Tax Status
No Tax
2.77%
Ranked in the US
#24
Oklahoma
Military Retirement Tax Status
Partial Exemptions
0.25%
Ranked in the US
#43
Oregon
Military Retirement Tax Status
Partial Exemptions
4.75%
Ranked in the US
#10
Pennsylvania
Military Retirement Tax Status
No Tax
3.07%
Ranked in the US
#21
Rhode Island
Military Retirement Tax Status
Partial Exemptions
3.75%
Ranked in the US
#16
South Carolina
Military Retirement Tax Status
Partial Exemptions
Ranked in the US
#47
South Dakota
Military Retirement Tax Status
No Tax
Ranked in the US
#48
Tennessee
Military Retirement Tax Status
No Tax
Ranked in the US
#49
Texas
Military Retirement Tax Status
No Tax
Ranked in the US
#50
Utah
Military Retirement Tax Status
No Tax
4.95%
Ranked in the US
#9
Vermont
Military Retirement Tax Status
Fully Tax
3.35%
Ranked in the US
#18
Virginia
Military Retirement Tax Status
Fully Tax
Ranked in the US
#31
Washington
Military Retirement Tax Status
No Tax
Ranked in the US
#1
West Virginia
Military Retirement Tax Status
No Tax
Ranked in the US
#23
Wisconsin
Military Retirement Tax Status
No Tax
3.54%
Ranked in the US
#17
Wyoming
Military Retirement Tax Status
No Tax
Ranked in the US
#51
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