Is military retirement pay taxed in Maryland?
By a Navy veteran. Updated October 2026.
Partly
Maryland: Exclusion of $12,500 under age 55 and $20,000 at 55 and over. Federal income tax still applies to retired pay in every state.
What this means for your plan
Maryland taxes part of military retired pay. The exclusion can depend on your age, your income or the year you served, and only the amount above the exclusion is taxed. Runway uses about 6% as a planning rate for the part that is taxed, and you can change it. Run your own numbers instead of assuming the full amount is taxed or exempt.
VA disability pay is not taxed by the federal government, and most states follow that treatment.
Local taxes in Maryland
Counties and Baltimore City add roughly 2.25% to 3.3% of taxable income. The state exclusion lowers that base. the planner’s default rate includes a typical county rate.
Questions
Does Maryland tax military retirement pay?
Partly. Exclusion of $12,500 under age 55 and $20,000 at 55 and over.
Is VA disability pay taxed in Maryland?
VA disability compensation is not taxed by the federal government, and most states follow that treatment. Confirm with the Comptroller of Maryland.
Where do I confirm the rules for Maryland?
Use the Comptroller of Maryland and the DFAS retired pay tax page. Rules change, so check the current year before you decide where to live.
See it for your family
The free planner puts your retired pay, VA pay and Maryland tax on one 24-month timeline, so you can see the month money gets tight. The States tab in the full version compares all 50 states and DC side by side.
Open the plannerSource and method
This summary comes from the state treatment data in the Runway planner, compiled from published state guides. It is not an official ruling. For the official rule, see the Comptroller of Maryland and the DFAS retired pay tax page.