Taxes on Military Retirement Pay by State in United States
Military retirement pay is subject to varying tax policies across U.S. states, reflecting different approaches to supporting veterans. Here's a comprehensive look at how military retirement pay is taxed across the states.
Which states do not tax military retirement pay?
Military retirement pay is not taxed in the following states:
Alabama
Alaska
Arizona
Arkansas
Connecticut
Florida
Illinois
Indiana
Iowa
Kansas
Louisiana
Maine
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Nebraska
Nevada
New Hampshire
New Jersey
New York
North Carolina
North Dakota
Ohio
Pennsylvania
South Dakota
Tennessee
Texas
Utah
Washington
Wisconsin
Wyoming
Which states partially tax military retirement pay?
The following states partially tax military retirement pay:
Colorado
Delaware
District of Columbia
Georgia
Idaho
Kentucky
Maryland
New Mexico
Oklahoma
Oregon
South Carolina
West Virginia
Which states fully tax military retirement pay?
Military retirement pay is fully taxed in the following states:
California
Montana
Rhode Island
Vermont
Virginia
How does state taxation affect military retirees?
The tax status of military retirement pay significantly influences where veterans choose to retire. States that exempt or partially exempt military retirement pay often provide additional financial relief for retirees. Consideration of state tax policies is critical in retirement planning for military veterans.
How can military retirees plan for taxes?
To maximize their retirement income, military retirees can:
- Relocate to states that do not tax military retirement pay.
- Explore tax deductions and credits available in partially taxing states.
- Consult financial advisors to optimize tax planning and savings strategies.
