Resources
Military Retirement Taxes by State
TY2026Where your retired pay is tax-free, where it's partially exempt, and the one place that still taxes all of it — verified for 2026.
Check your state
Texas
No state income taxNo state income tax.
Texas veterans office — full state benefits (VA directory)This is the income-tax dimension only
States also differ on property-tax relief for disabled veterans, tuition waivers, vet homes, and license benefits — those rules are county- and program-specific, so use the official state veterans office link above for the full picture before a retirement move.
All 50 states + DC
Tap your state on the map for its exact rule. Tap a count card above to filter the colors.
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Full reference
Every state's 2026 rule, in one table
| State | Treatment | 2026 rule |
|---|---|---|
| Alaska | No state income tax | No state income tax. |
| Alabama | Fully exempt | Military retired pay fully exempt from state income tax. |
| Arkansas | Fully exempt | Military retired pay fully exempt from state income tax. |
| Arizona | Fully exempt | Military retired pay fully exempt from state income tax. |
| California | Partial exemption | New for tax years 2025–2030: subtract up to $20,000 of military retired pay or SBP annuity if federal AGI is under $125,000 (single) / $250,000 (joint). Above those limits, fully taxed. Covers all uniformed services incl. USPHS and NOAA. Changed in 2025 — California previously taxed military retirement in full. |
| Colorado | Partial exemption | Under 55: exempt up to $15,000 (through 2028). 55–64: regular pension/annuity exclusion up to $20,000; 65+: up to $24,000. |
| Connecticut | Fully exempt | Military retired pay fully exempt from state income tax. |
| District of Columbia | Taxed as ordinary income | Military retired pay taxed as ordinary income — no military-specific exemption. |
| Delaware | Partial exemption | Military pension exempt up to $12,500 regardless of age (under 60 via the military provision; 60+ via the standard pension exclusion). |
| Florida | No state income tax | No state income tax. |
| Georgia | Partial exemption | Beginning tax year 2026 (HB 266, signed May 2025): up to $65,000 of military retired pay exempt regardless of age — married couples filing jointly may each claim it if both receive retired pay. Does not cover SBP survivor benefits or USPHS/NOAA retired pay. Through tax year 2025 the exclusion was age-tiered (under 62: $17,500; 62–64: $35,000; 65+: $65,000). |
| Hawaii | Fully exempt | Military retired pay fully exempt from state income tax. |
| Iowa | Fully exempt | Military retired pay fully exempt from state income tax. |
| Idaho | Partial exemption | Deduction for military retirement at 65+ (or 62+ if disabled): roughly $40,140 single / $60,210 married filing jointly (indexed annually; reduced by Social Security received). |
| Illinois | Fully exempt | Military retired pay fully exempt from state income tax. |
| Indiana | Fully exempt | Military retired pay fully exempt from state income tax (full exemption since tax year 2022). |
| Kansas | Fully exempt | Military retired pay fully exempt from state income tax. |
| Kentucky | Partial exemption | Pension income exclusion up to $31,110 per person (all pension income combined, any age). Service earned before Jan 1, 1998 is fully exempt. |
| Louisiana | Fully exempt | Military retired pay fully exempt from state income tax. |
| Massachusetts | Fully exempt | Military retired pay fully exempt from state income tax. |
| Maryland | Partial exemption | Military retirement subtraction: up to $12,500 under age 55; up to $20,000 at 55 and older. |
| Maine | Fully exempt | Military retired pay fully exempt from state income tax. |
| Michigan | Fully exempt | Military retired pay fully exempt from state income tax. |
| Minnesota | Fully exempt | Military retired pay fully exempt from state income tax (subtraction; credit alternative may apply). |
| Missouri | Fully exempt | Military retired pay fully exempt from state income tax. |
| Mississippi | Fully exempt | Military retired pay fully exempt from state income tax. |
| Montana | Partial exemption | For retirees establishing Montana residency: exemption of 50% of retired pay (or Montana-source income, whichever is less) for the first 5 years of residency. Otherwise standard pension rules apply. |
| North Carolina | Fully exempt | Military retired pay fully exempt from state income tax (full exemption since tax year 2021). |
| North Dakota | Fully exempt | Military retired pay fully exempt from state income tax. |
| Nebraska | Fully exempt | Military retired pay fully exempt from state income tax (100% exclusion since tax year 2022). |
| New Hampshire | No state income tax | No tax on wages or pensions; the interest-and-dividends tax was repealed effective 2025, so there is now no state income tax at all. |
| New Jersey | Fully exempt | Military retired pay fully exempt from state income tax. |
| New Mexico | Partial exemption | Military retirement exemption of up to $30,000 for tax years 2024 through 2026 (scheduled to sunset after 2026 unless extended). |
| Nevada | No state income tax | No state income tax. |
| New York | Fully exempt | Military retired pay fully exempt from state income tax. |
| Ohio | Fully exempt | Military retired pay fully exempt from state income tax. |
| Oklahoma | Fully exempt | Military retired pay fully exempt from state income tax (100% exemption since tax year 2022). |
| Oregon | Partial exemption | Only the portion of retired pay earned from service before Oct 1, 1991 is exempt; service entirely after that date is fully taxable. A 2025 bill to add a $17,500 exemption at age 63+ (SB 225) passed the Oregon Senate but stalled in committee and has not become law as of June 2026 — verify current status with the Oregon Dept. of Revenue. |
| Pennsylvania | Fully exempt | Military retired pay fully exempt from state income tax. |
| Rhode Island | Fully exempt | Military retired pay fully exempt from state income tax (full exemption since tax year 2023). |
| South Carolina | Fully exempt | Military retired pay fully exempt from state income tax (full exemption since tax year 2022). |
| South Dakota | No state income tax | No state income tax. |
| Tennessee | No state income tax | No state income tax. |
| Texas | No state income tax | No state income tax. |
| Utah | Partial exemption | Nonrefundable tax credit equal to Utah's flat income-tax rate (4.5% for 2025–26) times the military retired pay in your federal AGI — effectively cancels Utah tax on retired pay, but it is structured as a credit rather than an exemption. |
| Virginia | Partial exemption | Military Benefits Subtraction: up to $40,000 of military retired pay for tax year 2025 and later (the former age-55 requirement was removed). |
| Vermont | Partial exemption | Expanded for 2025+: full exemption with AGI under $125,000; phased partial exemption between $125,000–$175,000; no exemption above $175,000. Covers all uniformed services incl. USPHS and NOAA. |
| Washington | No state income tax | No state income tax. |
| Wisconsin | Fully exempt | Military retired pay fully exempt from state income tax. |
| West Virginia | Fully exempt | Military retired pay fully exempt from state income tax (full exemption since tax year 2018). |
| Wyoming | No state income tax | No state income tax. |
Field notes
The 2025–2026 wave: even California blinked
A decade ago, taxing military retired pay was normal. State legislatures have spent the last several years competing for veteran retirees — Indiana, Nebraska, North Carolina, Oklahoma, and South Carolina all moved to full exemptions around 2021-2022, Rhode Island followed in 2023, and Georgia's HB 266 (signed May 2025) replaces its age tiers with a flat $65,000 exemption for any age starting tax year 2026. Even the holdout finally moved: California, the last state taxing military retirement in full, enacted a subtraction of up to $20,000 for tax years 2025 through 2030 (federal AGI under $125,000 single / $250,000 joint). That leaves the District of Columbia as the only US jurisdiction with no military-specific break at all.
Watch the fine print in partial states. Most partial exemptions hinge on age (Maryland, Colorado, Idaho), income (California, Vermont), tax year sunsets (New Mexico's $30,000 runs through 2026; California's through 2030), or what the money is (Kentucky's $31,110 covers all pension income combined, not military pay on top). Oregon's exemption still only covers service before October 1991 — a 2025 bill to add a $17,500 exemption at 63+ passed the Senate but has not become law.
Income tax is one input, not the verdict. A no-income-tax state can claw it back in property taxes and insurance; a partial-exemption state can win on a disabled-veteran property exemption. Pair this table with the High-3 or BRS projection of what your pension will actually be, then verify the full benefits stack with the state's veterans office before you commit to a retirement ZIP code.
Verified June 10, 2026: Army Echoes / Soldier for Life MAB newsletter 2026-02 (California AB exemption, Vermont expansion, Oregon pending legislation); The Military Wallet 50-state matrix; state revenue department rules as quoted. Tax law changes mid-year — always confirm with the state's department of revenue and a tax professional before relocating.
FAQ
State taxes on military retirement — FAQs
- Which states don't tax military retirement in 2026?
- 37 states tax none of it: 9 have no state income tax at all (AK, FL, NV, NH, SD, TN, TX, WA, WY) and 28 more fully exempt military retired pay, including North Carolina, Arizona, Oklahoma, South Carolina, and West Virginia.
- Does California tax military retirement?
- Partially, as of tax year 2025. California now subtracts up to $20,000 of military retired pay or SBP annuity for filers with federal AGI under $125,000 (single) / $250,000 (joint), through tax year 2030. Above those income limits, retired pay remains fully taxed. Before 2025 California taxed it in full.
- Where is military retired pay still fully taxed?
- Only the District of Columbia taxes military retirement like ordinary income with no military-specific exemption.
- Is VA disability compensation taxed by any state?
- No. VA disability compensation is not federal taxable income and no state taxes it. This table covers military RETIRED pay (the DFAS pension), which states treat very differently.
- Do these exemptions cover SBP payments to survivors?
- Often, but not uniformly. California's new exemption explicitly includes Survivor Benefit Plan annuities, and several full-exemption states cover SBP the same as retired pay — but rules vary by state, so confirm SBP treatment with the state's revenue department before counting on it.
Keep going
Plan the whole retirement picture
REF: State DOR statutes, effective TY2026
Army Echoes MAB 2026-02 + The Military Wallet 50-state matrix + state revenue rules (verified 2026-06-10)
Results are estimates. Always verify with your finance office.
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