Some states don't charge income tax on military retired pay. In all states, VA & Social Security disability payments are tax-free.
If you have issues with retired pay and state income tax, including changing your withholding amount, you can always contact DFAS for assistance.
You can contact DFAS at:
|Defense Finance and Accounting Service|
|US Military Retirement Pay|
|8899 E 56 St|
|Indianapolis, IN 46249-1200|
States Without Personal Income Tax
Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming do not have a personal income tax. Two others, New Hampshire and Tennessee, tax only dividend and interest income.
States That Don't Tax Military Retirement Pay
The following states do not tax retired military pay.
- New Jersey
- New York
- North Carolina
- North Dakota
- West Virginia
States With Special Military Retirement Pay Exemptions
The following states have special provisions for military or public pensions:
- Colorado - Military retirees ages under age 55 can exclude up to $10,000 of their retirement pay from their gross income; those ages 55 - 64 can exclude up to $20,000 and those 65 and over can exclude up to $24,000.
- Delaware - Up to $2,000 of military retirement excluded for individuals under age 60; $12,500 if 60 or older.
- Georgia - Taxpayers over 62 or permanently disabled may be eligible for an exclusion of retired pay from gross taxable income.
- Idaho - Tax-free for retirees 65 and older, or disabled retirees 62 or older.
- Kentucky - Up to $31,110 is tax-free, you may be able to exclude more in some situations.
- Maryland - The first $5,000 is tax-free, that amount increases to $15,000 at age 55.
- Oklahoma - The greater of 75% of your retirement pay or $10,000 is tax free.
- Oregon - If you had military service before Oct. 1, 1991 you may be able to deduct a portion of your retirement pay.
- South Carolina - If you are under 65, up to $17,000 is tax-free. That amount increases to $30,000 at age 65.
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