{"id":3371,"date":"2020-02-01T06:17:07","date_gmt":"2020-02-01T10:17:07","guid":{"rendered":"http:\/\/wcmoa.org\/?p=3371"},"modified":"2020-02-01T06:17:07","modified_gmt":"2020-02-01T10:17:07","slug":"military-retirement-and-state-income-tax","status":"publish","type":"post","link":"https:\/\/wcmoa.org\/staging\/military-retirement-and-state-income-tax\/","title":{"rendered":"Military Retirement and State Income Tax"},"content":{"rendered":"
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Military Retirement and State Income Tax<\/h1>\n<\/div>\n
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Military.com<\/div>\n<\/div>\n
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Some states don’t charge income tax on military retired pay. In all states, VA & Social Security disability payments are tax-free.<\/p>\n

If you have issues with retired pay and state income tax, including changing your withholding amount, you can always contact DFAS for assistance.<\/p>\n

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You can contact DFAS at:<\/p>\n\n\n\n\n\n\n\n\n
Defense Finance and Accounting Service<\/td>\n<\/tr>\n
US Military Retirement Pay<\/td>\n<\/tr>\n
8899 E 56 St<\/td>\n<\/tr>\n
Indianapolis, IN 46249-1200<\/td>\n<\/tr>\n
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Phone:<\/strong>\u00a0800-321-1080<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

States Without Personal Income Tax<\/h2>\n

Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming<\/strong>\u00a0do not have a personal income tax. Two others,\u00a0New Hampshire and Tennessee<\/strong>, tax only dividend and interest income.<\/p>\n

Related: State tax information for active duty members, retirees, and survivors.<\/a><\/p>\n

States That Don’t\u00a0Tax Military Retirement Pay<\/h2>\n

The following states do not tax retired military pay.<\/p>\n\n\n\n\n\n\n\n\n
Alabama<\/td>\nIowa<\/td>\nMichigan<\/td>\nNew York<\/td>\n<\/tr>\n
Arkansas<\/td>\nKansas<\/td>\nMinnesota<\/td>\nNorth Dakota<\/td>\n<\/tr>\n
Connecticut<\/td>\nLouisiana<\/td>\nMississippi<\/td>\nOhio<\/td>\n<\/tr>\n
Hawaii<\/td>\nMaine<\/td>\nMissouri<\/td>\nPennsylvania<\/td>\n<\/tr>\n
Illinois<\/td>\nMassachusetts<\/td>\nNew Jersey<\/td>\nWest Virginia<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\nWisconsin<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

States With Special Military Retirement Pay Exemptions<\/h2>\n

The following states have special provisions for military or public pensions<\/strong>:<\/p>\n\n\n\n\n\n\n\n
Arizona1<\/sup><\/td>\nIndiana6<\/sup><\/td>\nNorth Carolina10<\/sup><\/td>\n<\/tr>\n
Colorado2<\/sup><\/td>\nKentucky7<\/sup><\/td>\nOklahoma11<\/sup><\/td>\n<\/tr>\n
Delaware3<\/sup><\/td>\nMaryland8<\/sup><\/td>\nOregon12<\/sup><\/td>\n<\/tr>\n
Georgia4<\/sup><\/td>\nNebraska9<\/sup><\/td>\nSouth Carolina13<\/sup><\/td>\n<\/tr>\n
Idaho5<\/sup><\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
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  1. The first $3,500 of military retirement pay is exempt.<\/li>\n
  2. Military retirees ages 55 – 64 can exclude up to $20,000 in any one tax\u00a0year from their retirement pay, those 65 and over can exclude up to $24,000.<\/li>\n
  3. Up to $2,000 of military retirement excluded for individuals under age 60; $12,500 if 60 or older.<\/li>\n
  4. Taxpayers over 62 or permanently disabled may be eligible for a $4,000 exclusion of retired pay.<\/li>\n
  5. Tax-free for retirees 65 and older, or disabled retirees 62 or older.<\/li>\n
  6. Up to $6,250 plus 25% of retired pay over that amount is tax-free for 2019. That\u00a0will increase to 50% in 2020, 75% in 2021 and 100% for taxable years beginning after 2021.<\/li>\n
  7. Up to $31,110 is tax-free, you may be able to exclude more in some situations.<\/li>\n
  8. The first\u00a0$5,000 is tax-free, that amount increases to $15,000 at age 55.<\/li>\n
  9. Special rules see our\u00a0Nebraska State Benefits Page<\/a>.<\/li>\n
  10. Only if you had at least 5 years active duty before August 12,1989<\/li>\n
  11. The greater of 75% of your retirement pay or $10,000<\/li>\n
  12. If you had military service before October 1, 1991 you may be able to deduct a portion of your retirement pay. If you didn’t have military or federal service prior to October 1, 1991, your military retirement is taxed normally.<\/li>\n
  13. If you are under 65, up to $14,000 is tax-free. That amount increases to $27,000 at age 65.<\/li>\n<\/ol>\n

    Related: State tax information for active duty members, retirees, and survivors.<\/a><\/p>\n

    Get the Latest Financial Tips<\/strong><\/h2>\n

    Whether you’re trying to balance your budget, build up your credit, select a good life insurance program or are gearing up for a home purchase, Military.com has you covered.\u00a0Subscribe to Military.com<\/a>\u00a0and get the latest military benefit updates and tips delivered straight to your inbox.<\/p>\n<\/div>\n

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    Related Topics<\/h4>\n

    Military Taxes<\/a><\/div>\n

    \u00a9 Copyright 2020 Military.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.<\/div>\n
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