Is military retirement pay taxed in Rhode Island?
By a Navy veteran. Updated October 2026.
No
Rhode Island: Fully exempt. Federal income tax still applies to retired pay in every state.
What this means for your plan
Rhode Island exempts military retired pay, so your retired pay is not reduced by state income tax. Other income, such as a second job, a spouse’s wages or business profit, is generally still taxed under Rhode Island’s normal rules.
VA disability pay is not taxed by the federal government, and most states follow that treatment.
Local taxes in Rhode Island
No local income tax that we know of. Confirm with your city or county.
Questions
Does Rhode Island tax military retirement pay?
No. Fully exempt.
Is VA disability pay taxed in Rhode Island?
VA disability compensation is not taxed by the federal government, and most states follow that treatment. Confirm with the Rhode Island Division of Taxation.
Where do I confirm the rules for Rhode Island?
Use the Rhode Island Division of Taxation 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 Rhode Island 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 Rhode Island Division of Taxation and the DFAS retired pay tax page.