What State Does Not Tax Military Retirement?
As a military veteran or retiree, you’ve earned the right to receive a pension for your service. However, with this comes the worry about state taxes. Some states can take a significant chunk of your hard-earned benefits, while others don’t tax military retirement at all. In this article, we’ll explore which state doesn’t tax military retirement and what you need to know.
The Bottom Line:
West Virginia is the state that does not tax military retirement. Yes, you read that right! West Virginia is the only state that doesn’t tax military retirement benefits. This is a significant advantage for veterans and retirees who call the Mountain State home.
Other States with Favorable Tax Policies:
While West Virginia is the only state that doesn’t tax military retirement, other states offer more favorable tax policies. These states have varying degrees of tax exemptions or reductions for military retirement benefits. Here are some of the top states:
• Florida: Florida does not tax military retirement pay, but it does tax interest and dividends earned on these benefits.
• Texas: Texas does not tax military retirement pay, but it does tax interest and dividends earned on these benefits.
• Colorado: Colorado does not tax military retirement pay, but it does tax interest and dividends earned on these benefits.
• Tennessee: Tennessee does not tax military retirement pay, but it does tax interest and dividends earned on these benefits.
States with No Exemptions or Significant Taxation:
Unfortunately, many states tax military retirement benefits, sometimes with little to no exemption. These states can take a significant chunk of your benefits, leaving you with less money to enjoy your golden years. Here are some examples:
• California: California taxes military retirement pay, with a maximum exemption of $10,000.
• New York: New York taxes military retirement pay, with a maximum exemption of $20,000.
• Illinois: Illinois taxes military retirement pay, with a maximum exemption of $20,000.
• New Jersey: New Jersey taxes military retirement pay, with a maximum exemption of $20,000.
What About the Other States?
If you’re wondering what the other states do, here’s a breakdown:
• Alabama: Alabama taxes military retirement pay, with a maximum exemption of $10,000.
• Alaska: Alaska taxes military retirement pay, with a maximum exemption of $10,000.
• Arizona: Arizona taxes military retirement pay, with a maximum exemption of $10,000.
• Arkansas: Arkansas taxes military retirement pay, with a maximum exemption of $10,000.
• Connecticut: Connecticut taxes military retirement pay, with a maximum exemption of $20,000.
• Delaware: Delaware taxes military retirement pay, with a maximum exemption of $10,000.
• Georgia: Georgia taxes military retirement pay, with a maximum exemption of $10,000.
• Idaho: Idaho taxes military retirement pay, with a maximum exemption of $10,000.
• Indiana: Indiana taxes military retirement pay, with a maximum exemption of $10,000.
• Kentucky: Kentucky taxes military retirement pay, with a maximum exemption of $10,000.
• Louisiana: Louisiana taxes military retirement pay, with a maximum exemption of $10,000.
• Maine: Maine taxes military retirement pay, with a maximum exemption of $20,000.
• Maryland: Maryland taxes military retirement pay, with a maximum exemption of $20,000.
• Massachusetts: Massachusetts taxes military retirement pay, with a maximum exemption of $20,000.
• Michigan: Michigan taxes military retirement pay, with a maximum exemption of $10,000.
• Minnesota: Minnesota taxes military retirement pay, with a maximum exemption of $10,000.
• Mississippi: Mississippi taxes military retirement pay, with a maximum exemption of $10,000.
• Missouri: Missouri taxes military retirement pay, with a maximum exemption of $10,000.
• Montana: Montana taxes military retirement pay, with a maximum exemption of $10,000.
• Nebraska: Nebraska taxes military retirement pay, with a maximum exemption of $10,000.
• Nevada: Nevada taxes military retirement pay, with a maximum exemption of $10,000.
• New Hampshire: New Hampshire taxes military retirement pay, with a maximum exemption of $10,000.
• New Mexico: New Mexico taxes military retirement pay, with a maximum exemption of $10,000.
• North Carolina: North Carolina taxes military retirement pay, with a maximum exemption of $10,000.
• North Dakota: North Dakota taxes military retirement pay, with a maximum exemption of $10,000.
• Ohio: Ohio taxes military retirement pay, with a maximum exemption of $10,000.
• Oklahoma: Oklahoma taxes military retirement pay, with a maximum exemption of $10,000.
• Oregon: Oregon taxes military retirement pay, with a maximum exemption of $10,000.
• Pennsylvania: Pennsylvania taxes military retirement pay, with a maximum exemption of $20,000.
• Rhode Island: Rhode Island taxes military retirement pay, with a maximum exemption of $20,000.
• South Carolina: South Carolina taxes military retirement pay, with a maximum exemption of $10,000.
• South Dakota: South Dakota taxes military retirement pay, with a maximum exemption of $10,000.
• Utah: Utah taxes military retirement pay, with a maximum exemption of $10,000.
• Vermont: Vermont taxes military retirement pay, with a maximum exemption of $20,000.
• Virginia: Virginia taxes military retirement pay, with a maximum exemption of $20,000.
• Washington: Washington taxes military retirement pay, with a maximum exemption of $10,000.
• Wisconsin: Wisconsin taxes military retirement pay, with a maximum exemption of $10,000.
• Wyoming: Wyoming taxes military retirement pay, with a maximum exemption of $10,000.
Conclusion:
When it comes to state taxes on military retirement benefits, it’s essential to know which states don’t tax or exempt these benefits. West Virginia is the only state that doesn’t tax military retirement benefits, making it an attractive option for veterans and retirees. Other states have varying degrees of tax exemptions or reductions, while some states tax military retirement benefits significantly. It’s crucial to research and understand the tax policies of the states you’re considering moving to, to ensure you get the most out of your hard-earned benefits.
