Which states don’t tax military retirement pay?
By a Navy veteran. Updated October 2026.
Short answer: 9 states have no income tax on retired pay, and 29 more exempt military retired pay entirely or almost entirely. The rest tax it in part, with age or income limits. Federal income tax still applies everywhere.
Rules change often, and published guides sometimes disagree. Use this page to plan, then confirm with your state’s tax agency before you choose where to live. This is planning guidance, not tax advice.
No state income tax (9 states)
- Alaska
- Florida
- Nevada
- New Hampshire
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
New Hampshire and Tennessee tax neither wages nor retirement pay. Check local and property taxes, which can offset the savings.
Retired pay fully exempt (27 states)
- Alabama
- Arizona
- Arkansas
- Connecticut
- Hawaii
- Illinois
- Indiana
- Iowa
- Kansas
- Louisiana
- Maine
- Massachusetts
- Michigan
- Mississippi
- Missouri
- Nebraska
- New Jersey
- New York
- North Dakota
- Ohio
- Oklahoma
- Pennsylvania
- Rhode Island
- South Carolina
- Utah
- West Virginia
- Wisconsin
These states have an income tax but exempt military retired pay. Utah applies a credit that offsets the tax on retired pay for most retirees. Some cities and counties add their own taxes, so check yours.
Mostly exempt, but sources disagree
- Minnesota. Most guides list it as fully exempt. One describes a partial exemption or credit.
- North Carolina. Most guides list it as fully exempt. One older guide lists it as taxed.
Partial exemptions and limits
These states tax some retired pay. The exclusion often depends on your age or income.
- California. Up to $20,000 of retired pay excluded if income is under $125,000 (single) or $250,000 (joint). Some guides still list it as fully taxed.
- Colorado. Exclusion of $15,000 under age 55, $20,000 at 55 to 64, and $24,000 at 65 and over.
- Delaware. Exclusion of $12,500 under age 60. One guide lists $25,000 for everyone starting in 2026.
- District of Columbia. Taxed like other income. One guide lists a $3,000 exclusion at age 62 and over.
- Georgia. Exclusion of $17,500 under 62, $35,000 at 62 to 64, and $65,000 at 65 and over. One guide lists $65,000 for all ages starting in 2026, which is what Runway uses.
- Idaho. Tax free at age 65 and over, or at 62 and over if disabled. Taxed before that.
- Kentucky. Up to $31,110 of retirement income excluded.
- Maryland. Exclusion of $12,500 under age 55 and $20,000 at 55 and over.
- Montana. Guides disagree. One lists up to 50% deductible for the first five years, another lists it as fully exempt. Runway uses 50%.
- New Mexico. Up to $30,000 of military retired pay exempt.
- Oregon. Taxed as ordinary income. Only service before October 1, 1991 qualifies for a deduction.
- Vermont. Exempt if household income is $125,000 or less. Partial exemption up to $175,000. None above that.
- Virginia. Deduction of $40,000 at age 55 and over. Taxed before that.
Check before you move
- Property tax and insurance vary widely and can matter more than income tax.
- VA disability pay is not taxed by the federal government, and most states follow that treatment.
- Survivor Benefit Plan and TSP withdrawals may be treated differently from retired pay.
- Your spouse’s income and any new job are taxed as normal income.
See what it means for your family
The free planner puts your retired pay, VA pay and state tax on one 24-month timeline. The States tab in the full version compares all 50 states and DC side by side.
Open the plannerSource and method
These figures come from the state treatment data in the Runway planner, compiled from published state guides. For official rules, see your state’s department of revenue and the DFAS retired pay tax page.