State-by-State Military Retirement Tax Guide
Where you retire can save you thousands of dollars per year. Compare military retirement taxes, VA benefits, property tax exemptions, and cost of living across all states.
💡 Key Insights
🚫 No State Income Tax (9 states):
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming
💰 Full Exemption for Military Retirement:
29 more states fully exempt it. In total, 38 states charge no income tax on military retired pay in 2026
📊 Partial Exemption:
12 states tax part of it. Exclusions run from $12,500 (Delaware, Maryland) to $65,000 (Georgia, new for 2026)
🏠 Property Tax Exemptions:
Most states offer additional property tax breaks for disabled veterans
🗺️ Jump to Any State Guide
Select a state to view detailed tax information, military bases, and cost of living
Featured State Guides
Detailed guides with 2026 tax data, cost of living, military bases, and VA facilities.
⭐ Texas
NO State Income Tax
- ✓ Zero state income tax on all income
- ✓ Property tax exemptions for disabled veterans ($5K-$12K+)
- ✓ Cost of living 8% below national average
- ✓ Strong military community and job market
Annual Savings: $2,100+ vs high-tax states →
🌴 Florida
NO State Income Tax
- ✓ Zero state income tax on all income
- ✓ Property tax exemptions up to 100% for disabled vets
- ✓ Cost of living at national average
- ✓ Warm weather year-round, no estate tax
1.5+ million veterans call Florida home →
☀️ California
First $20,000 Tax-Free
- ✓ First $20,000 of retired pay exempt for 2025-2029
- ✓ AGI limits: under $125K single, $250K joint
- ✓ Cost of living 38% above national average
- ✓ Excellent weather, diverse job opportunities
First-ever CA exemption starts with 2025 returns →
🌺 Hawaii
100% Tax-Free Retirement
- ✓ Military retired pay 100% tax-free at any age
- ✓ Highest cost of living in US (84% above average)
- ✓ Strong military community and infrastructure
- ✓ Unique island lifestyle, year-round paradise
Island living with a fully exempt pension →
🏛️ Virginia
First $40,000 Tax-Free
- ✓ Up to $40,000 of retired pay exempt at any age
- ✓ Age-55 rule removed in 2024; excess taxed at 5.75%
- ✓ Pentagon, Norfolk Naval Base, Fort Belvoir
- ✓ Cost of living 4% above national average
Home to 730,000+ veterans →
🌲 North Carolina
100% Tax-Free Retirement
- ✓ 100% exempt since 2021 (20+ years or medical retirement)
- ✓ Fort Liberty, Camp Lejeune, Cherry Point MCAS
- ✓ Cost of living 9% below national average
- ✓ Mountains AND beaches, four seasons
Affordable East Coast living →
🍑 Georgia
First $65,000 Tax-Free (2026+)
- ✓ Up to $65,000 of retired pay exempt at any age (2026 law)
- ✓ Fort Moore, Fort Stewart, Robins AFB, Kings Bay
- ✓ Cost of living 10% below national average
- ✓ No Social Security tax, warm climate
New 2026 law covers most military pensions →
🌲 Washington
NO State Income Tax
- ✓ Zero state income tax on all income
- ✓ Joint Base Lewis-McChord (JBLM), Naval Base Kitsap
- ✓ Excellent VA healthcare and military community
- ✓ Beautiful Pacific Northwest scenery
Save $2,000-12,000/year vs high-tax states →
🏔️ Colorado
Up to $24,000 Exemption (65+)
- ✓ Under 55: $15,000 exempt. Ages 55-64: $20,000
- ✓ Age 65+: Up to $24,000 exempt
- ✓ Colorado Springs: 100,000+ veterans, 5 bases
- ✓ World-class outdoor recreation, 300+ days of sun
Perfect for outdoor enthusiasts →
🗽 Pennsylvania
100% Tax-Free Retirement
- ✓ 100% exemption on ALL military retirement pay
- ✓ 3.07% flat state income tax (lowest in nation)
- ✓ Carlisle Barracks, Fort Indiantown Gap, NSA Mechanicsburg
- ✓ Cost of living 2-3% below national average
No age or income limits →
🌴 South Carolina
100% Tax-Free Retirement
- ✓ 100% exempt since tax year 2022
- ✓ No dollar cap and no age requirement
- ✓ Fort Jackson, Parris Island, Shaw AFB, JB Charleston
- ✓ Cost of living 6% below national average
Warm weather + major savings →
🦬 South Dakota
NO State Income Tax
- ✓ NO state income tax - one of only 9 states
- ✓ Ellsworth AFB - B-1B Lancer home
- ✓ Cost of living 11% below national average
- ✓ 100% property tax exemption for 100% disabled vets
Keep every dollar of your pension →
🐴 Kentucky
First $31,110 Tax-Free
- ✓ First $31,110 of retired pay exempt each year
- ✓ 3.5% flat state income tax (2026)
- ✓ Fort Campbell (101st Airborne), Fort Knox
- ✓ Cost of living 11% below national average
Ultra-affordable living →
🌵 Arizona
100% Tax-Free Retirement
- ✓ 100% exempt since 2021 (old $3,500 cap repealed)
- ✓ Low 2.5% flat state income tax
- ✓ Luke AFB, Davis-Monthan AFB, Fort Huachuca
- ✓ 300+ days of sunshine, outdoor recreation
In-state tuition for all veterans →
🎸 Tennessee
NO State Income Tax
- ✓ Zero state income tax on all income
- ✓ Helping Heroes Grant for veteran education
- ✓ Fort Campbell (101st Airborne), Arnold AFB
- ✓ Cost of living 10% below national average
Nashville healthcare hub + music scene →
🎰 Nevada
NO State Income Tax
- ✓ Zero state income tax on all income
- ✓ Joint DoD/VA hospital at Nellis AFB
- ✓ Nellis AFB (Red Flag), NAS Fallon (TOPGUN)
- ✓ World-class entertainment, year-round sunshine
Las Vegas + outdoor recreation →
🏈 Alabama
100% Tax-Free Retirement
- ✓ 100% exemption on ALL military retirement pay
- ✓ Huntsville: NASA, defense contractors, tech hub
- ✓ Maxwell AFB, Fort Novosel, Redstone Arsenal
- ✓ Cost of living 14% below national average
GI Dependent Scholarship for families →
🌶️ New Mexico
First $30,000 Tax-Free
- ✓ First $30,000 of retired pay exempt each year
- ✓ Kirtland AFB, Holloman AFB, White Sands
- ✓ Vietnam Veterans Scholarship Program
- ✓ 300+ sunny days, affordable housing
Rich culture + outdoor adventures →
🌾 Oklahoma
100% Tax-Free Retirement
- ✓ 100% exemption on ALL military retirement pay
- ✓ Tinker AFB, Fort Sill, Altus AFB, Vance AFB
- ✓ Tuition waivers for veteran dependents
- ✓ Cost of living 15% below national average
Ultra-affordable with full benefits →
🏔️ Alaska
NO State Income Tax + PFD
- ✓ Zero state income tax on all income
- ✓ Annual PFD dividend (~$1,700/person)
- ✓ JBER, Fort Wainwright, Eielson AFB
- ✓ World-class outdoor recreation
Adventure + tax savings →
🦀 Maryland
$12,500 Exemption + DC Jobs
- ✓ First $12,500 exempt ($20,000 at age 55+)
- ✓ #1 area for defense contractor jobs
- ✓ Fort Meade, NSA, Aberdeen, Andrews
- ✓ Near DC, excellent schools
Best for second careers →
🌰 Ohio
100% Tax-Free Retirement
- ✓ 100% military retirement tax-free (since 2008)
- ✓ Wright-Patterson AFB (30,000 employees)
- ✓ Cost of living 9% below average
- ✓ Affordable housing ($230K median)
Midwest value + full exemption →
🌾 Illinois
100% Tax-Free Retirement
- ✓ 100% military retirement + Social Security exempt
- ✓ Naval Station Great Lakes (Navy's only boot camp)
- ✓ Scott AFB (Air Mobility Command HQ)
- ✓ Illinois Veteran Grant (free tuition)
Full exemption + education benefits →
🎺 Missouri
100% Tax-Free Retirement
- ✓ 100% military retirement tax-free (since 2016)
- ✓ Fort Leonard Wood (Army Engineer School)
- ✓ Whiteman AFB (B-2 Spirit stealth bomber)
- ✓ Cost of living 11% below national average
Affordable Midwest living →
⚜️ Louisiana
100% Tax-Free Retirement
- ✓ 100% military retirement + Social Security exempt
- ✓ Barksdale AFB (Global Strike Command HQ)
- ✓ Fort Johnson (JRTC combat training)
- ✓ Very low property taxes (0.55%)
Rich culture + full tax benefits →
🏔️ Michigan
100% Tax-Free Retirement
- ✓ Military pensions 100% exempt at any age
- ✓ Detroit Arsenal defense contractor jobs
- ✓ Camp Grayling (largest NG training center)
- ✓ Cost of living 5% below average
Great Lakes lifestyle + affordability →
🏁 Indiana
100% Tax-Free Retirement
- ✓ 100% military retirement tax-free (since 2022)
- ✓ NSA Crane (3rd largest Navy installation)
- ✓ 1% property tax cap (constitutional)
- ✓ Cost of living 10% below average
Full exemption + ultra-affordable →
🌲 Minnesota
100% Tax-Free Retirement
- ✓ 100% exempt (full subtraction since 2016)
- ✓ Camp Ripley (largest NG training in US)
- ✓ Mayo Clinic healthcare access
- ✓ Minnesota GI Bill ($10K education)
Full exemption + quality of life →
🎸 Mississippi
100% Exempt + Lowest COL
- ✓ 100% exemption on military retirement
- ✓ LOWEST cost of living in nation (15-20% below avg)
- ✓ Keesler AFB, Columbus AFB, NAS Meridian, Camp Shelby
- ✓ Full property tax exemption for 100% disabled vets
Maximum value for your pension →
⛰️ West Virginia
100% Exempt + Low COL
- ✓ 100% military retirement tax-free
- ✓ Cost of living 10% below national average
- ✓ Camp Dawson, McLaughlin ANG Base
- ✓ Property tax exemption for 100% disabled vets
Mountain living + affordability →
🧀 Wisconsin
100% Tax-Free Retirement
- ✓ 100% military retirement + SS exempt
- ✓ Fort McCoy (major Army training center)
- ✓ Wisconsin GI Bill (8 semesters free)
- ✓ Cost of living 5% below average
Full exemption + great education →
🌽 Iowa
100% Tax-Free Retirement
- ✓ 100% military retirement tax-free
- ✓ Flat 3.8% state income tax on other income
- ✓ Camp Dodge (Iowa National Guard HQ)
- ✓ Cost of living 10% below national average
Ultra-affordable heartland living →
💎 Arkansas
100% Tax-Free Retirement
- ✓ 100% military retirement exempt (since 2018)
- ✓ Little Rock AFB, Fort Chaffee, Pine Bluff Arsenal
- ✓ Lowest property taxes in nation (0.62%)
- ✓ Cost of living 14% below average
Natural State + full tax freedom →
🌻 Kansas
100% Tax-Free Retirement
- ✓ 100% military retirement tax-free
- ✓ Fort Riley (1st Infantry), Fort Leavenworth (CGSC)
- ✓ Strong military community heritage
- ✓ Cost of living 12% below average
Military hub + full exemption →
🏔️ New Hampshire
NO State Income Tax
- ✓ Zero state income tax (one of 9 states)
- ✓ Portsmouth Naval Shipyard nearby (Maine)
- ✓ Pease Air National Guard Base
- ✓ Live Free or Die - strong veteran culture
Tax freedom in New England →
🚢 Connecticut
100% Tax-Free Retirement
- ✓ 100% military retirement tax-free
- ✓ Submarine Capital of the World
- ✓ Electric Boat (submarine builder) jobs
- ✓ Coast Guard Academy in New London
Perfect for submarine veterans →
🦞 Maine
100% Tax-Free + Coastal Living
- ✓ 100% military retirement tax-free
- ✓ Beautiful coastal New England living
- ✓ Bangor ANG Base, Portsmouth Naval Shipyard
- ✓ Property tax exemption for vets ($6K-$50K)
Coastal beauty + tax-free pension →
🗽 Massachusetts
100% Tax-Free Retirement
- ✓ 100% military retirement tax-free
- ✓ World-class healthcare (Harvard, MGH)
- ✓ Major defense contractors (Raytheon)
- ✓ Birthplace of American liberty
Healthcare excellence + history →
🌲 Oregon
Taxed, but NO Sales Tax
- ✓ Pensions taxed; only pre-October 1991 service is exempt
- ✓ ZERO sales tax softens the hit
- ✓ Beautiful Pacific Northwest
- ✓ Near JBLM for base access
No sales tax, but plan for income tax →
🤠 Wyoming
NO State Income Tax
- ✓ Zero state income tax
- ✓ F.E. Warren AFB (nuclear missile)
- ✓ Very low property taxes (0.57%)
- ✓ Yellowstone & Grand Teton access
Cowboy State tax freedom →
🗽 New York
100% Tax-Free Retirement
- ✓ 100% military retirement tax-free
- ✓ Social Security also exempt
- ✓ Fort Drum (10th Mountain), West Point
- ✓ Upstate NY very affordable
Full exemption + strong VA network →
🏔️ Utah
100% Tax-Free Retirement
- ✓ 100% military retirement tax-free
- ✓ Hill AFB - largest west of Mississippi
- ✓ 5 national parks ("Mighty Five")
- ✓ World-class skiing
Outdoor paradise + full exemption →
🦌 Montana
Taxed + NO Sales Tax
- ✓ Retired pay taxed at 4.7-5.65%; a 5-year, 50% break exists for new residents who work
- ✓ ZERO sales tax helps offset it
- ✓ Malmstrom AFB (ICBM mission)
- ✓ Glacier & Yellowstone access
Big Sky Country, but the pension is taxed →
🌾 Nebraska
100% Tax-Free Retirement
- ✓ 100% exempt since tax year 2022
- ✓ Offutt AFB - STRATCOM headquarters
- ✓ Cost of living 8% below national average
- ✓ Property tax credits for disabled vets ($4,500)
Full exemption + affordability →
🥔 Idaho
Taxed Until Age 65
- ✓ Taxed at 5.3% until age 65; then up to $40,536 deductible, less Social Security
- ✓ Mountain Home AFB (366th FW)
- ✓ Affordable Mountain Home area
- ✓ Stunning outdoor recreation
Gem State, but plan for the 5.3% tax →
🦀 Delaware
First $12,500 Tax-Free
- ✓ First $12,500 of retired pay exempt; rest taxed at up to 6.6%
- ✓ ZERO sales tax, and Social Security is untaxed
- ✓ Dover AFB (largest East Coast port)
- ✓ Low property taxes
First State: no sales tax, modest pension break →
🏙️ New Jersey
100% Tax-Free Retirement
- ✓ 100% military retirement exempt
- ✓ Near NYC - excellent job market
- ✓ Property tax credit up to $6,000
- ✓ Joint Base McGuire-Dix-Lakehurst
Garden State + full exemption →
🌾 North Dakota
100% Tax-Free Retirement
- ✓ Military retired pay 100% exempt since 2019
- ✓ Cost of living 8% BELOW average
- ✓ Minot AFB + Grand Forks AFB
- ✓ Property tax exemption $120K (100% disabled)
Peace Garden State + exempt pension →
⚓ Rhode Island
100% Tax-Free Retirement
- ✓ 100% military retirement exempt
- ✓ Naval Station Newport (Naval War College)
- ✓ Coastal living + beaches
- ✓ Property tax exemption $44K (100% disabled)
Ocean State + full exemption →
🍁 Vermont
Tax-Free Under $125K AGI
- ✓ Fully exempt when AGI is $125,000 or less (phases out by $175,000)
- ✓ Low crime + excellent quality of life
- ✓ Property tax exemption up to $40K
- ✓ Beautiful rural living + outdoor recreation
Green Mountain State + exemption for most →
Calculate Your Retirement Income by State
See exactly how much you'll keep in different states with our free calculator
Use Free Calculator →