5 minute read
Military retirement pay is a benefit provided to members of the armed forces who have served for 20 years or more. This pay is calculated based on a member’s rank and years of service, and it is meant to provide financial stability for military retirees in their post-service years. While military retirement pay is taxable at the federal level, some states have chosen not to tax this income, providing an additional benefit to military retirees who reside in these states.
There are currently 32 states in the United States that do not tax military retirement pay. These states are:
In these states, military retirees are able to keep more of their hard-earned retirement pay, providing them with additional financial stability in their post-service years. This tax exemption is seen as a way to show appreciation for the sacrifices made by members of the armed forces and to provide them with the financial support they need in their retirement years.
However, it’s important to note that while military retirement pay is not taxed at the state level in these states, it is still subject to federal taxes. This means that military retirees in these states will still have to pay federal income taxes on their retirement pay, although they may be eligible for other tax benefits, such as deductions for certain expenses related to their military service.
There are currently nine states in the United States that do not tax personal income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
These states have chosen not to tax personal income as a way to attract residents and businesses, as well as to provide their residents with more disposable income. By not taxing personal income, residents of these states are able to keep more of their hard-earned money and have more financial stability.
However, it’s important to note that while these states do not tax personal income, they may still have other forms of taxation, such as sales tax or property tax. Additionally, while personal income may not be taxed at the state level, it is still subject to federal income tax.
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Here is a list of states that partially tax military retirement pay:
It’s important to note that this list may not be exhaustive and that the tax laws surrounding military retirement pay can change over time. Additionally, the rules and regulations surrounding the partial taxation of military retirement pay can vary from state to state, so military retirees should research the laws in their specific state and consult with a tax professional if necessary.
Here is a list of states that fully tax military retirement pay:
In summary, the taxation of military retirement pay can vary from state to state in the United States. Currently, there are 32 states that do not tax military retirement pay, 9 states that do not tax personal income, and several states that partially tax military retirement pay. There are also a few states that fully tax military retirement pay. It’s important for military retirees to understand the tax laws in their state and to consult with a tax professional if necessary, as the rules surrounding the taxation of military retirement pay can change over time and vary from state to state.
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