States That Don’t Tax Military Retirement Pay (2026)
38 of 50 states take $0 state income tax on your military pension. Find yours below — every entry verified against current state law.
Verified June 2026
Where you retire can change what your pension is worth by thousands of dollars a year. As of the 2026 tax year, 38 states take nothing: 9 have no state income tax at all, and 29 more have an income tax but exempt military retired pay completely. Vermont joins them if your income is under its cap, and the remaining 11 states exempt part of your retired pay — no state still taxes it with no break at all. Each state below links to our full state benefits page, which also covers property tax exemptions and other veteran benefits.
No state income tax (9 states)
Nothing to exempt — these states tax no wage or retirement income.
Alaska Florida Nevada New Hampshire South Dakota Tennessee Texas Washington WyomingIncome tax, but military retirement fully exempt (29 states)
These states tax income but take $0 of your military pension, with no age or income conditions.
Alabama Arizona Arkansas Connecticut Hawaii Illinois Indiana Iowa Kansas Louisiana Maine Massachusetts Michigan Minnesota Mississippi Missouri Nebraska New Jersey New York North Carolina North Dakota Ohio Oklahoma Pennsylvania Rhode Island South Carolina Utah West Virginia WisconsinPartially exempt (11 states)
A dollar cap, age condition, or percentage applies — details in the table below.
California Colorado Delaware Georgia Idaho Kentucky Maryland Montana New Mexico Oregon VirginiaAll 50 states at a glance
| State | Treatment | 2026 rule |
|---|---|---|
| Alabama | Fully exempt | Alabama has a state income tax but fully exempts military retirement pay with no age or income conditions. |
| Alaska | No state income tax | Alaska has no state income tax, so military retirement pay is not taxed. |
| Arizona | Fully exempt | Arizona has fully exempted military retirement pay from state income tax since tax year 2021, with no dollar cap. |
| Arkansas | Fully exempt | Arkansas has fully exempted military retirement pay from state income tax since 2018. |
| California | Partially exempt | For tax years 2025 through 2029, California lets retirees with federal AGI up to $125,000 (single) or $250,000 (joint) exclude up to $20,000 of military retired pay or SBP income; amounts above that are taxed normally. |
| Colorado | Partially exempt | Colorado lets military retirees under 55 deduct up to $15,000 of retired pay (through tax year 2028); those 55-64 may deduct up to $20,000 and those 65+ up to $24,000 under the general pension deduction. |
| Connecticut | Fully exempt | Connecticut fully exempts military retirement pay with no age or income conditions (its AGI thresholds apply only to other pension income). |
| Delaware | Partially exempt | Delaware excludes up to $12,500 of military pension income from state tax regardless of the retiree's age. |
| Florida | No state income tax | Florida has no state income tax, so military retirement pay is not taxed. |
| Georgia | Partially exempt | Beginning with the 2026 tax year, Georgia exempts up to $65,000 of military retirement income for retirees of any age; amounts above the cap remain taxable. |
| Hawaii | Fully exempt | Hawaii fully exempts military retirement pay, as it does other employer-funded pension income. |
| Idaho | Partially exempt | Idaho lets qualifying military retirees (62+, disabled, or under 62 with earned income under 2025 rules) deduct retired pay up to roughly $40,000 single / $60,000 joint, reduced by Social Security received. |
| Illinois | Fully exempt | Illinois fully exempts military retirement pay, as it exempts virtually all retirement income. |
| Indiana | Fully exempt | Indiana has fully exempted military retirement pay from state income tax since tax year 2022. |
| Iowa | Fully exempt | Iowa fully exempts military retirement pay from state income tax regardless of age. |
| Kansas | Fully exempt | Kansas fully exempts military retirement pay from state income tax. |
| Kentucky | Partially exempt | Kentucky fully exempts military pensions for service before 1998 and otherwise excludes up to $31,110 of retirement income per person each year. |
| Louisiana | Fully exempt | Louisiana fully exempts military retirement pay from state income tax. |
| Maine | Fully exempt | Maine fully exempts military retirement pay from state income tax with no dollar cap. |
| Maryland | Partially exempt | Maryland excludes $12,500 of military retirement income for retirees under 55 and $20,000 for those 55 and older. |
| Massachusetts | Fully exempt | Massachusetts fully exempts military retirement pay, treating it like other exempt contributory government pensions. |
| Michigan | Fully exempt | Michigan fully exempts military retirement pay from state income tax. |
| Minnesota | Fully exempt | Minnesota allows an unlimited subtraction for military retirement pay (or an optional tax credit instead) with no age or income limits. |
| Mississippi | Fully exempt | Mississippi fully exempts military retirement pay, as it exempts all qualified retirement income. |
| Missouri | Fully exempt | Missouri fully exempts military retirement pay from state income tax. |
| Montana | Partially exempt | Montana taxes military retirement pay but, since 2024, lets retirees who newly move to the state or begin receiving retired pay as residents exempt the lesser of 50% of that pay or their Montana wage income for five consecutive years. |
| Nebraska | Fully exempt | Nebraska has fully exempted military retirement pay from state income tax since tax year 2022. |
| Nevada | No state income tax | Nevada has no state income tax, so military retirement pay is not taxed. |
| New Hampshire | No state income tax | New Hampshire taxes neither wages nor pensions; its remaining interest-and-dividends tax was repealed effective January 1, 2025. |
| New Jersey | Fully exempt | New Jersey fully exempts military retirement pay from state income tax. |
| New Mexico | Partially exempt | New Mexico exempts up to $30,000 of military retirement pay through tax year 2026, after which the exemption is scheduled to sunset unless extended. |
| New York | Fully exempt | New York fully exempts military retirement pay from state income tax. |
| North Carolina | Fully exempt | Since 2021, North Carolina fully exempts military retirement pay for retirees who served at least 20 years or were medically retired — essentially all military pension recipients. |
| North Dakota | Fully exempt | North Dakota has fully exempted military retirement pay from state income tax since 2019. |
| Ohio | Fully exempt | Ohio fully exempts military retirement pay from state income tax. |
| Oklahoma | Fully exempt | Oklahoma has fully exempted military retirement pay from state income tax since tax year 2022. |
| Oregon | Partially exempt | Oregon taxes military retirement pay except the portion attributable to service performed before October 1, 1991. |
| Pennsylvania | Fully exempt | Pennsylvania fully exempts military retirement pay, as it exempts retirement income generally. |
| Rhode Island | Fully exempt | Rhode Island has fully exempted military retirement pay from state income tax since tax year 2023. |
| South Carolina | Fully exempt | South Carolina has fully exempted military retirement pay for retirees of all ages since tax year 2022. |
| South Dakota | No state income tax | South Dakota has no state income tax, so military retirement pay is not taxed. |
| Tennessee | No state income tax | Tennessee has no state income tax on wages or retirement income, so military retirement pay is not taxed. |
| Texas | No state income tax | Texas has no state income tax, so military retirement pay is not taxed. |
| Utah | Fully exempt | Utah effectively fully exempts military retirement pay through a nonrefundable tax credit that offsets the entire tax on it, in place since 2021. |
| Vermont | Fully exempt (with conditions) | Starting with the 2025 tax year, Vermont fully exempts military retirement pay for retirees with federal AGI of $125,000 or less, phasing out between $125,000 and $175,000. |
| Virginia | Partially exempt | Virginia's military benefits subtraction is $40,000 per year (fully phased in for 2025 and beyond), available at any age; retired pay above that is taxed. |
| Washington | No state income tax | Washington has no state income tax, so military retirement pay is not taxed. |
| West Virginia | Fully exempt | West Virginia has fully exempted military retirement pay from state income tax since 2018. |
| Wisconsin | Fully exempt | Wisconsin fully exempts military retirement pay from state income tax. |
| Wyoming | No state income tax | Wyoming has no state income tax, so military retirement pay is not taxed. |
Planning the move? Run your numbers first: the Military Retirement Calculator estimates your pension under BRS or High-3, and Best States for Veterans weighs taxes alongside property exemptions, healthcare, and cost of living.
Frequently asked questions
Which states don’t tax military retirement pay in 2026?
38 of the 50 states take zero state income tax on military retirement pay in 2026: 9 states have no income tax at all (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming), and 29 more have an income tax but fully exempt military retired pay. Vermont also fully exempts it for retirees under an AGI threshold.
Does California tax military retirement pay?
Partially. For tax years 2025 through 2029, California lets retirees with federal AGI up to $125,000 (single) or $250,000 (joint) exclude up to $20,000 of military retired pay or SBP income. Amounts above the exclusion are taxed as regular income. Before 2025, California taxed military retirement in full.
Which states recently improved their military retirement tax exemption?
Recent changes include California’s new $20,000 exclusion (2025–2029), Vermont’s full exemption under a $125,000 AGI cap (2025), and Georgia’s exemption rising to $65,000 at any age starting with the 2026 tax year. Over the past few years Arizona, Indiana, Nebraska, North Carolina, Oklahoma, Rhode Island, South Carolina, and Utah all moved to full exemptions.
Is SBP (Survivor Benefit Plan) income taxed the same way?
Often, but not always. Many states treat SBP annuity payments like military retired pay (California’s new exclusion explicitly covers SBP), but treatment varies by state. Check your state’s page or department of revenue before counting on it.
State tax law changes frequently — several states improved their exemptions for the 2025 and 2026 tax years. Every entry on this page was verified against state revenue department guidance and current statutes in June 2026. This is general information, not tax advice; confirm with your state's department of revenue or a tax professional before filing.