Which States Tax Military Retirement Pay in 2026? The Best States for Military Retirees, Priced in All 51 Jurisdictions

Published 2026-10-28. Tax year 2026 (the return filed in early 2027).

Which states tax military retirement pay in 2026?

For the four military retirees priced here, 33 of the 51 jurisdictions charged no state income tax on their military retirement pay: 9 with no income tax on any of their income (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming) and 24 that tax income but exempt this military pay for all four (Alabama, Arizona, Arkansas, Connecticut, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Wisconsin). 14 more charged something for some of the four, through an age, a cap or an income test, or because the pay lifted their other income over a state limit (California, Colorado, Delaware, Georgia, Idaho, Indiana, Maryland, New Mexico, Rhode Island, South Carolina, Utah, Vermont, Virginia, West Virginia), and 4 taxed it exactly like any other pension (District of Columbia, Kentucky, Montana, Oregon). For a single retiree at 67 with $30,000 of military retirement pay, the most state tax it added was $1,522 a year, in Oregon; for a couple at 56 and 54 with $48,000 of it beside their wages, $3,893, in Oregon.

Rank your own household in every state, military retirement pay included
Free: military pay, Social Security, pension, IRA, wages, interest, dividends and gains, all 51 jurisdictions at once.

The four military retirees

Each household receives military retirement pay beside its other income: wages from a second career, or Social Security and IRA money in retirement. Three figures per state: the state income tax the military pay adds (the state tax with it, less the state tax on the other income alone), the state tax the same dollars would add as a private pension, and the difference, which is what the state's own military rule is worth to the household. On the couples' returns every amount is the retiree's own.

How the 51 jurisdictions treat military retirement pay

Why age and income matter. Several states exempt military retirement pay only from an age, or exempt a fixed amount below it, cap the exemption, phase it out above an income, or credit part of the tax instead; a few count it against a general retirement exclusion. And exempt pay can still cost state tax indirectly: it counts in the income tests of other breaks (a Social Security exclusion, an elderly credit), so the figure here is everything the pay adds. Each state's own rules, with their official sources, are on its state guide and in the pension-exclusion map.

The best states for a military retiree couple at 67

The ten highest state taxes on the same military pay

Every state

Related: Your retirement tax in every state · Which states tax retirement income in 2026 · State pension-exclusion map · Which states tax Social Security in 2026 · States with no income tax

Download the data

Every case on this page, with its inputs: military-retirement-tax-by-state-2026.csv (the 204 household-state cases) · military-retirement-tax-by-state-2026.json (CC0). Dollar amounts in USD a year.

Questions

Which states do not tax military retirement pay in 2026?

For the four military retirees priced here, 33 jurisdictions charged no state tax on their military retirement pay: 9 with no income tax on any of their income (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming) and 24 that exempt it (Alabama, Arizona, Arkansas, Connecticut, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Wisconsin).

Which states tax military retirement pay like any other pension?

4 jurisdictions taxed it exactly as they taxed the same dollars of private pension for all four households: District of Columbia, Kentucky, Montana, Oregon.

What are the best states to retire for military retirees?

For a couple at 67 with $45,000 of military retirement pay, $40,000 of Social Security and $20,000 of IRA withdrawals, the lowest whole state income tax was in Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois.

Does California tax military retirement pay?

For a single retiree at 67, $30,000 of military retirement pay added $0 of California tax a year, $51 less than the same private pension; at 45 with wages, $692.

Does Virginia tax military retirement pay?

For the couple at 56 and 54, $48,000 of military retirement pay added $460 of Virginia tax a year ($2,760 as a private pension); for the single retiree at 67, $0.

Does Georgia tax military retirement pay before 62?

For the single retiree at 45 with wages, $30,000 of military retirement pay added $0 of Georgia tax a year; at 67, $0.

Method and sources

Every figure was computed by QuantCalc's open tax engines (federal 2.5.1, state 1.21.2) through the household module the free retirement tax in every state calculator runs, then recomputed by the C engines behind the federal and state tax APIs (military retirement pay as the state API's pensionMilitary) from independently written requests, agreeing to the cent. Military retirement pay is a taxable pension on the federal return; the state engine receives the federal return's figures (the taxable Social Security, the federal tax) as a state return reads them. Each state's military rule and its official source are documented in the state tax engine documentation; the federal sources:

• 26 U.S. Code § 86
• Publication 915, Social Security and Equivalent Railroad Retirement Benefits
• 26 U.S. Code § 151
• Rev. Proc. 2025-32: 2026 inflation-adjusted items (incl. One Big Beautiful Bill amendments)

What is not modelled

• The Indiana and Maryland figures include the county income tax every county there levies, on the state return, at a default county rate: Indiana at 1.75% (county rates); Maryland at 3.12% (county rates). A resident pays their own county's rate. Other local income taxes (city and school-district taxes, and county taxes in other states) are not included (see local income tax on retirement income).
• Income tax only: no property or sales tax, and no property-tax exemptions for veterans.
• The retiree's own military retirement pay: Survivor Benefit Plan annuities, VA disability compensation (not taxable) and combat-related special compensation are not priced. North Carolina's exemption needs 20 years of service (or a medical retirement) and New Jersey adds a veteran exemption: both are read as met by a retiree with their own retired pay.
• On the couples' returns every amount is the retiree's own; a state that applies its rules per person treats a different split differently.
• Wages are W-2 wages; withdrawals are ordinary distributions. The households are illustrations, not averages.

An estimate, not tax advice. These are computed examples for the 2026 tax year from QuantCalc's open tax engines (federal 2.5.1, state 1.21.2). Your own return depends on facts these examples do not include. Check any decision with your tax preparer before acting.

@misc{quantcalc2026whichstatestaxmilitaryretirementpayin202,
  title  = {Which States Tax Military Retirement Pay in 2026? Four Military Retirees Priced in Every State},
  author = {{QuantCalc Research}},
  year   = {2026},
  url    = {https://quantcalc.app/research/military-retirement-tax-by-state-2026/},
  note   = {Accessed <date>}
}