States That Don't Tax Military Retirement Pay (2026)
Of the 50 states and D.C., 28 fully exempt military retired pay from state income tax and 9 have no state income tax on it, so 37 do not tax it for tax year 2026. 12 more exempt part of it or only some retirees, and 2 (District of Columbia and Oregon) still tax it like other income. The counts follow the table below and include the 5 rows marked “verify with the state”.
Maintained by Archie Chang · Sources checked against state agency and statute text on October 30, 2026 · Methodology & sources
State-by-state table
Showing 51 of 51 rows. Each rule is the state’s own wording, summarized; the picker below shows the full rule.
| Rule for 2026 | Source | ||
|---|---|---|---|
| Alabama | Fully exempt | Military retirement pay is exempt from Alabama income tax. | Alabama Department of Revenue |
| Alaska | No state income tax | No state income tax on retirement pay. | Alaska Department of Revenue, Tax Division |
| Arizona | Fully exempt | Retired or retainer pay of the uniformed services: 100% subtraction. | Arizona Department of Revenue |
| Arkansas | Fully exempt | Military retirement benefits are exempt; the exemption shares the $6,000 retirement exclusion. | Arkansas DFA |
| California | Partly exempt | Taxed, with a $20,000 exclusion (for years before 2030) if federal AGI is $125,000 or less ($250,000 joint or surviving spouse). | California Franchise Tax Board |
| Colorado | Partly exempt | Under 55: up to $15,000. Age 55-64: up to $20,000. Age 65+: up to $24,000. | Colorado Department of Revenue |
| Connecticut | Fully exempt | Military retirement pay is fully exempt (Line 44). | Connecticut DRS |
| Delaware | Partly exempt | Up to $12,500 for 2026; $15,000 in 2027, $20,000 in 2028, $25,000 from 2029. | Delaware Code Title 30, section 1106 (resident modifications) |
| District of Columbia | TaxedVerify with the state | Taxed like other income; the old $3,000 exclusion applied only before 2015. | D.C. Code section 47-1803.02 (gross income, items excluded) |
| Florida | No state income tax | No state income tax on retirement pay. | Florida Department of Revenue |
| Georgia | Partly exempt | Under 62: up to $17,500, plus $17,500 more with Georgia earned income over $17,500. At 62 and over, the general retirement exclusion. | Georgia Department of Revenue |
| Hawaii | Fully exempt | Military pension is not taxed by Hawaii (Form N-11, Line 13). | Hawaii Department of Taxation |
| Idaho | Partly exemptVerify with the state | Retirees who are disabled, 62 or older, or working: deduction up to $48,216 single, $72,324 joint (2025), less Social Security. | Idaho State Tax Commission |
| Illinois | Fully exempt | Military retirement income is subtracted on Form IL-1040, Line 5. | Illinois Department of Revenue |
| Indiana | Fully exempt | Military retirement income and survivor’s benefits: full deduction (code 632). | Indiana Department of Revenue |
| Iowa | Fully exempt | Military retirement pay from DFAS is exempt (IA 1040 Schedule 1, line 4). | Iowa Department of Revenue |
| Kansas | Fully exempt | Federal retirement for armed forces service is exempt (Schedule S, line A14). | Kansas Department of Revenue |
| Kentucky | Partly exemptVerify with the state | Pension exclusion up to $31,110 (2025); service before 1998 is fully exempt. | Kentucky Department of Revenue |
| Louisiana | Fully exempt | Federal retirement benefits, military and nonmilitary, may be excluded. | Louisiana Department of Revenue |
| Maine | Fully exempt | Military retirement and survivor benefits are fully exempt. | Maine Revenue Services |
| Maryland | Partly exempt | At least 55: up to $20,000. Under the age of 55: up to $12,500. | Maryland Comptroller |
| Massachusetts | Fully exempt | U.S. military pensions are excluded from Massachusetts gross income. | Massachusetts DOR |
| Michigan | Fully exempt | Military retirement benefits are exempt (MI-1040 Schedule 1). | Michigan Department of Treasury |
| Minnesota | Fully exempt | Military pension and retirement pay: subtraction on Schedule M1M, line 25. | Minnesota Department of Revenue |
| Mississippi | Fully exempt | Retirement income from federal retirement systems is exempt in total. | Mississippi Department of Revenue |
| Missouri | Fully exempt | Military pension is subtracted in full (Form MO-A, Part 1, Line 10). | Missouri Department of Revenue |
| Montana | Partly exempt | Subtraction of the lesser of Montana wage income or 50% of military retirement income, for 5 consecutive years. | Montana Code Annotated 15-30-2120 (adjustments to federal taxable income) |
| Nebraska | Fully exempt | All military retirees may exclude 100% of military retirement benefits. | Nebraska Department of Revenue |
| Nevada | No state income tax | No state income tax on retirement pay. | Nevada Department of Taxation |
| New Hampshire | No state income tax | No state income tax on wages or retirement pay; the interest and dividends tax is repealed. | New Hampshire Department of Revenue Administration |
| New Jersey | Fully exempt | U.S. military pension and survivor’s benefits are not taxable. | New Jersey Division of Taxation |
| New Mexico | Partly exempt | Up to $30,000 per retiree (Form PIT-ADJ, line 24). | New Mexico Taxation and Revenue |
| New York | Fully exempt | Military pension payments are totally exempt. | New York Department of Taxation and Finance |
| North Carolina | Partly exempt | Deduction for 20+ years of service or medical retirement; Bailey rule for 5+ years of creditable service by Aug. 12, 1989. | North Carolina Department of Revenue |
| North Dakota | Fully exempt | Military retirement benefits are subtracted in full (Form ND-1, line 14). | North Dakota Tax Commissioner |
| Ohio | Fully exempt | Retired personnel pay for uniformed service is deductible. | Ohio Department of Taxation |
| Oklahoma | Fully exempt | Each individual may exclude 100% of Armed Forces retirement benefits. | Oklahoma Tax Commission |
| Oregon | TaxedVerify with the state | Taxed. Only the share of a federal pension earned before Oct. 1, 1991 can be subtracted; a credit for age 62+ with low income. | Oregon Department of Revenue |
| Pennsylvania | Fully exempt | Retired or retainer pay of a uniform service is exempt from PA personal income tax. | Pennsylvania Department of Revenue |
| Rhode Island | Fully exempt | Military service pension: full modification on Form RI-1040, line 1v. | Rhode Island Division of Taxation |
| South Carolina | Fully exempt | All military retirement income is deductible (SC1040 lines p-4 to p-6). | South Carolina Department of Revenue |
| South Dakota | No state income tax | No state income tax on retirement pay. | South Dakota Department of Revenue |
| Tennessee | No state income tax | No state income tax on retirement pay; the Hall tax on interest and dividends was repealed. | Tennessee Department of Revenue |
| Texas | No state income tax | No state income tax; the Texas Constitution bars an individual income tax. | Texas Constitution, Article VIII, Section 24-a (Texas Legislative Council) |
| Utah | Fully exemptVerify with the state | Nonrefundable credit equal to the tax rate times military retirement pay. | Utah State Tax Commission |
| Vermont | Partly exempt | Full exemption if AGI is $125,000 or less; phased out up to $175,000. | Vermont Department of Taxes |
| Virginia | Partly exempt | Subtraction of up to $40,000 of military benefits, at any age. | Virginia Tax |
| Washington | No state income tax | No state income tax in 2026; a 9.9% tax on income over $1 million starts in 2028. | Washington Department of Revenue |
| West Virginia | Fully exempt | All military retirement income is exempt (Schedule M, line 32). | West Virginia State Tax Department |
| Wisconsin | Fully exempt | U.S. military retirement payments are exempt (Schedule SB, line 12). | Wisconsin Department of Revenue |
| Wyoming | No state income tax | No state income tax on retirement pay. | Wyoming Legislative Service Office |
Pick a state to see its full rule
North Carolina: Partly exempt
North Carolina allows a deduction (Schedule S, line 21) for uniformed service retirement payments received by a retired member who served at least 20 years or who was medically retired. It does not apply to severance pay, and a former spouse who receives a court-ordered share of the retirement pay does not qualify. Separately, the Bailey settlement (line 20) lets certain government retirees, including military, with five or more years of creditable service as of August 12, 1989, and their beneficiaries, deduct retirement benefits regardless of the 20-year condition; the instructions say benefits from other federal plans may or may not be excluded depending on the Bailey rulings. The same income cannot be deducted on both lines.
Basis: Tax year 2021 and later (2025 instructions).
Survivor Benefit Plan annuities
Named in the official source as covered. Payments from the Survivor Benefit Plan to a beneficiary of a retired member who served at least 20 years or was medically retired are deductible.
Official wording
Uniformed Service retirement payments received by a retired member who served at least 20 years in the Uniformed Service or who was medically retired from the Uniformed Service. Note: The deduction does not apply to severance payments received by a person due to separation under 10 U.S.C. Chapter 61.
As a result of the North Carolina Supreme Court’s decision in Bailey v. State of North Carolina, North Carolina may not tax certain retirement benefits received by retirees (or by beneficiaries of retirees) of the state of North Carolina and its local governments or by United States government retirees (including military).
The exclusion applies to retirement benefits received from certain defined benefit plans, such as the North Carolina Teachers’ and State Employees’ Retirement System, the North Carolina Local Governmental Employees’ Retirement System, the North Carolina Consolidated Judicial Retirement System, the Federal Employees’ Retirement System, or the United States Civil Service Retirement System, if the retiree had five or more years of creditable service as of August 12, 1989.
Benefits from other state, local, and federal retirement plans may or may not be excluded depending on rulings in the Bailey case.
Because such payments are made to a person other than the retired member of the Armed Forces, the former spouse does not qualify for the Deduction.
What the categories mean
- No state income tax (9). The state has no broad-based individual income tax, so it does not tax military retired pay.
- Fully exempt (28). The state exempts military retired pay from its income tax with no dollar cap.
- Partly exempt (12). The state exempts only part of it: up to a dollar cap, for some retirees only, or phased out by income or age.
- Taxed (2). The state taxes military retired pay like other income, apart from a limited federal pension subtraction.
A state with no income tax does not tax military retired pay, and each of the 9 such rows cites the state’s own agency or statute for that. The category is our reading of the state’s wording, not the state’s label. Retired pay and the federal tax on it are not the same question: a state may start from your federal return and then subtract the retired pay, or exclude it outright.
Survivor Benefit Plan annuities, CRSC and VA disability
Survivor Benefit Plan annuities
Check the annuity separately from the retired pay. The official sources for 22 states with an income tax name survivor or Survivor Benefit Plan payments as covered: Arizona, California, Connecticut, Idaho, Indiana, Louisiana, Maine, Maryland, Minnesota, Montana, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, South Carolina, Utah, Vermont, Virginia, West Virginia, and Wisconsin. Missouri says SBP annuities do not qualify for its military retirement subtraction. For 19 states the source does not mention SBP annuities; that is not the same as taxable, so ask the state. To see the annuity itself, use the Survivor Benefit Plan calculator.
CRSC and VA disability
This page is about retired pay. Whether VA disability compensation and Combat-Related Special Compensation are taxed is covered on is VA disability taxable and the CRSC calculator page; a state return generally starts from the federal return, so look at the state’s instructions for any item you report federally. Pay dates are on the military retirement pay dates page.
Rules that changed or start later
These rows carry a change that the official source gives a date for. Tax year 2025 is noted where the rule began then; later dates are shown as the state states them.
- Delaware. Senate Bill 219 is shown as signed on 8/17/26. It raises the limit in steps that begin with taxable year 2027. The act text read here does not say which tax year the domicile paragraph first applies to.
- Georgia. House Bill 266: up to $65,000 for individuals under age 65, effective January 1, 2027 for taxable years beginning on or after that date (Section 3(b) of the act).
- Vermont. Act 71 was signed into law on June 25, 2025 and takes effect beginning with the 2025 tax year.
- Virginia. Tax year 2024 allowed up to $30,000. The $40,000 amount starts with tax year 2025.
Rows marked “verify with the state”
5 rows are marked because the official source itself leaves the 2026 treatment open. Each shows what the source says and why we could not confirm 2026. We did not read the 2026 session laws of every state, so a 2026 law that none of the sources below mentions is not reflected.
- District of Columbia. The Office of Tax and Revenue 2025 D-40 booklet does not address military retired pay. This row rests on the statute text, which limits the $3,000 exclusion to years before 2015.
- Idaho. The Tax Commission says it recalculates the maximum each year. The 2026 maximums are not published yet; the amounts shown are for 2025.
- Kentucky. The Schedule M states the exclusion by year ("The 2025 exclusion amount is ... $31,110"), while the Department page footnotes a different amount only for 2017 and earlier, which suggests a fixed amount since 2018. The statute (KRS 141.019) could not be read here, the 2026 Schedule M is not published, and the 2026 session was not checked for a military pension bill.
- Oregon. Publication OR-17 names military pensions only in its retirement income credit text ("Federal pensions (includes military) not subtracted"), not in the text of the federal pension subtraction itself. House Bill 2050 shows no chapter number in the legislature’s records, but the 2026 session and the 2026 return instructions were not checked.
- Utah. The credit equals the tax rate, and the Tax Commission documents readable here list the rate only for 2023 and 2024. The 2026 rate and the current TC-40 instructions were not available to read.
Frequently asked questions
What states don't tax military retirement pay?
37 of the 50 states and D.C. do not tax it for tax year 2026. 28 fully exempt it: Alabama, Arizona, Arkansas, Connecticut, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Utah, West Virginia, and Wisconsin. 9 have no broad-based state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Another 12 exempt part of it: California, Colorado, Delaware, Georgia, Idaho, Kentucky, Maryland, Montana, New Mexico, North Carolina, Vermont, and Virginia.
Does North Carolina tax military retirement?
North Carolina allows a deduction (Schedule S, line 21) for uniformed service retirement payments received by a retired member who served at least 20 years or who was medically retired. It does not apply to severance pay, and a former spouse who receives a court-ordered share of the retirement pay does not qualify. Separately, the Bailey settlement (line 20) lets certain government retirees, including military, with five or more years of creditable service as of August 12, 1989, and their beneficiaries, deduct retirement benefits regardless of the 20-year condition; the instructions say benefits from other federal plans may or may not be excluded depending on the Bailey rulings. The same income cannot be deducted on both lines. Basis: Tax year 2021 and later (2025 instructions).
Does Virginia tax military retirement?
Virginia allows a subtraction of up to $40,000 of eligible military benefits on tax year 2025 and later returns, and the statute says that tier is allowed for an individual of any age. The benefits must be included in federal income. If two married members of the military both receive qualifying benefits on a joint return, each spouse can take the maximum. Any amount received by a Medal of Honor recipient as military retirement income is subtracted in full. TSP distributions do not qualify. Basis: Tax year 2025 and later.
Does California tax military retirement pay?
California taxes military retired pay received by a California resident. For tax years beginning on or after January 1, 2025 and before January 1, 2030, a qualified taxpayer may exclude retired pay or Survivor Benefit Plan annuity payments, not to exceed $20,000 for each type of payment, if federal AGI does not exceed $125,000 ($250,000 for a surviving spouse or a joint return). The Franchise Tax Board also says the exclusion is capped at $20,000 for a surviving spouse, spouses filing a joint return, and any other individual who did not exceed the AGI limits; it does not explain how the two $20,000 statements combine. Nonresidents are not taxed on military retired pay. Basis: Tax years 2025 through 2029.
Do states with no income tax tax military retirement?
No. The 9 states with no broad-based individual income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) do not tax military retired pay. Each row in the table links to the state agency or statute that says so. Washington has a new tax on income over $1 million that starts in 2028.
Do states tax Survivor Benefit Plan annuities the same way?
Not always. The official sources for 22 states with an income tax name survivor or Survivor Benefit Plan payments as part of the exemption or subtraction. Missouri says SBP annuities do not qualify for the military retirement subtraction but can qualify for its public pension exemption. For the others the source does not say, which is not the same as taxable, so ask the state.
Do states tax VA disability pay or CRSC?
This page covers military retired pay only. See the pages on whether VA disability is taxable and on CRSC for the federal rules. A state return usually starts from your federal return, so check your state instructions for any item you report federally.
What does "verify with the state" mean in the table?
5 rows carry it. It marks a state whose official source leaves the 2026 treatment open, for example a dollar limit stated by year with no 2026 figure yet, an enacted change with different start dates in different sources, or an agency that does not address military retired pay. The row says what the source shows and why we could not confirm 2026. State instructions for 2026 are usually published from December 2026 to January 2027.
Related pages
For your retired pay before tax, use the military retirement pay calculator and the pay chart for 2026. For next year’s increase, see the 2027 COLA; for when the pay arrives, the pay dates. For survivors, the Survivor Benefit Plan calculator; for disability pay, see is VA disability taxable.
Sources by state
Every link below is the state’s own revenue or taxation department, its form instructions, or its statute or legislature site.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming