Military Retirement in Oklahoma: Complete 2026 Tax Guide
100% military retirement pay exemption
Quick Summary: Oklahoma Military Retirement Taxes (2026)
- ✓ Military retirement pay: 100% EXEMPT from state tax
- ✓ VA disability payments: Tax-free (federal and state)
- ✓ Survivor Benefit Plan (SBP): Also 100% exempt
- ✓ Property tax: Exemptions for disabled veterans
- ✓ Overall ranking: Top-tier for military retirees
Why Oklahoma Is Excellent for Military Retirement
Oklahoma provides a 100% exemption on military retirement pay, making it one of the most tax-friendly states for veterans. Combined with one of the lowest costs of living in the nation (15% below average), your retirement dollars stretch significantly further here.
The Sooner State has a deep military heritage with major installations like Tinker AFB (one of the largest Air Force bases) and Fort Sill. Over 300,000 veterans call Oklahoma home, creating strong military communities throughout the state.
2026 Oklahoma Military Retirement Tax Breakdown
State Income Tax on Military Retirement Pay
100% Exempt!
Oklahoma exempts 100% of military retirement pay from state income tax. Your entire military pension is tax-free at the state level. This applies to all branches of service and all retirement types (regular, reserve, disability retirement).
VA Disability Compensation
✓ Completely Tax-Free
VA disability payments are tax-exempt at both the federal and Oklahoma state levels. Combined with the military retirement exemption, veterans can receive substantial tax-free income.
Other Tax Benefits for Oklahoma Veterans (2026)
| Benefit | Details |
|---|---|
| Property Tax Exemption |
|
| Sales Tax | 4.5% state rate + local (total 7-10%). Groceries taxed but at lower rate in some areas. |
| Vehicle Tax | Disabled veterans with service-connected disabilities may qualify for vehicle tax exemptions. |
| Hunting/Fishing | Free lifetime hunting and fishing license for 60%+ disabled veterans. |
Real Example: How Much You'll Save in Oklahoma (2026)
Example Scenario: E-7 Retired After 20 Years
- • Military retirement pay: $2,800/month ($33,600/year)
- • VA disability (70%): $1,916/month ($22,992/year)
- • Part-time civilian job: $25,000/year
- • Total annual income: $81,592
Oklahoma (100% Exempt)
Military retirement: $0 state tax
Only civilian income taxed (~$1,250)
State tax: ~$1,250
California (9.3% Tax Bracket)
Most income taxed
State tax: ~$3,500
Annual Oklahoma Savings: $2,250+
Over 20 years: $45,000+ saved
Cost of Living in Oklahoma for Military Retirees (2026)
Oklahoma offers a cost of living 15% below the national average, making your retirement income stretch further:
| Category | Oklahoma vs. National Average | Notes |
|---|---|---|
| Housing | -25% cheaper | Median home: $200,000 statewide, $250,000 OKC metro (2026) |
| Groceries | -8% cheaper | Major grocery chains, commissaries at military bases |
| Healthcare | -10% cheaper | Multiple VA facilities, TRICARE widely accepted |
| Transportation | -12% cheaper | Low gas prices, affordable vehicle insurance |
| Utilities | -5% cheaper | Natural gas abundant, moderate utility costs |
Major Military Installations in Oklahoma
✈️ Air Force
- Tinker AFB - Oklahoma City - One of largest AF bases, major employer
- Altus AFB - Altus - Airlift training
- Vance AFB - Enid - Pilot training
🏰 Army
- Fort Sill - Lawton - Fires Center of Excellence
- Field Artillery and Air Defense training
- Large retiree community
🎖️ National Guard
- Oklahoma National Guard - Facilities statewide
- 45th Infantry Division heritage
- Strong community ties
🏥 Military Medical
- Reynolds Army Health Clinic (Fort Sill)
- 72nd Medical Group (Tinker)
- Excellent TRICARE network
Best Cities in Oklahoma for Military Retirees (2026)
| City | Nearby Base | Median Home Price | Why It's Great |
|---|---|---|---|
| Oklahoma City | Tinker AFB | $250,000 | State capital, major job market, VA hospital, growing downtown |
| Midwest City | Tinker AFB | $180,000 | Adjacent to Tinker, very military-friendly, affordable |
| Lawton | Fort Sill | $150,000 | Most affordable, huge veteran community, base access |
| Tulsa | NG/Reserve | $230,000 | Second largest city, growing tech scene, affordable suburbs |
| Norman | Tinker AFB | $270,000 | University town, good schools, 20 min to OKC |
VA Healthcare & Resources in Oklahoma
- Oklahoma City VA Health Care System - Full-service medical center, specialty care
- Jack C. Montgomery VA Medical Center (Muskogee) - Comprehensive care for eastern OK
- Community-Based Outpatient Clinics - Tulsa, Lawton, Ardmore, and more
- Vet Centers - Readjustment counseling in OKC, Tulsa, Lawton
Education Benefits for Veterans & Families in Oklahoma
Oklahoma provides education benefits including tuition waivers for dependents of disabled/deceased veterans, in-state tuition for all veterans, and participation in the Yellow Ribbon Program.
Oklahoma Tuition Waiver for Dependents
FREE Tuition for Eligible Dependents
Children and spouses of veterans who died in service, are 100% permanently disabled, or are POW/MIA may receive tuition waivers at Oklahoma public colleges and universities.
Eligibility Requirements
| Requirement | Details |
|---|---|
| Veteran Status | Died in action, 100% permanent disability, or POW/MIA |
| Oklahoma Resident | Veteran was Oklahoma resident at time of entry or disability |
| Age Limit | Children: typically under 26 (varies) |
| Coverage | Tuition waiver at Oklahoma public institutions |
In-State Tuition for Veterans
All veterans using GI Bill benefits qualify for immediate in-state tuition at Oklahoma public colleges regardless of residency status.
Oklahoma University Tuition Rates (2026)
| Institution | In-State Tuition | Out-of-State | Savings |
|---|---|---|---|
| University of Oklahoma | ~$12,500 | ~$28,000 | $15,500/yr |
| Oklahoma State University | ~$10,500 | ~$26,000 | $15,500/yr |
| University of Central Oklahoma | ~$8,000 | ~$18,000 | $10,000/yr |
Yellow Ribbon Program Schools
Participating Schools
- University of Oklahoma
- Oklahoma State University
- University of Tulsa (private)
- Oklahoma City University
How It Works
- School contributes toward tuition
- VA matches the contribution
- Reduces/eliminates out-of-pocket costs
- Must have 100% Post-9/11 GI Bill
How to Apply
- Dependent Tuition Waiver: Apply through Oklahoma Department of Veterans Affairs
- In-State Tuition: Submit DD-214 to school's registrar
- Yellow Ribbon: Contact school's VA certifying official
- Questions? Contact ODVA: 405-521-3684
Official Resources: Oklahoma Dept of Veterans Affairs
Pros and Cons of Retiring in Oklahoma
✅ Pros
- • 100% military retirement tax exemption
- • Very low cost of living (15% below average)
- • Affordable housing ($150K-$250K)
- • Major military bases (Tinker, Fort Sill)
- • Strong veteran community (300K+ vets)
- • Tuition waivers for dependents
- • No estate tax
- • Friendly people, low traffic
⚠️ Cons
- • Tornado risk (spring/early summer)
- • Hot, humid summers
- • Higher sales tax (7-10% with local)
- • Limited public transportation
- • Smaller metro areas than coastal states
- • Some rural areas lack services
Frequently Asked Questions
Does Oklahoma tax military retirement pay?
No. Oklahoma provides a 100% exemption for military retirement pay. Your entire military pension is tax-free at the state level.
Does Oklahoma tax VA disability payments?
No. VA disability compensation is tax-free at both the federal and state levels, including Oklahoma.
What is the cost of living in Oklahoma?
Oklahoma has a cost of living approximately 15% below the national average. Housing is particularly affordable with median home prices around $200,000 statewide.
What major military bases are in Oklahoma?
Oklahoma hosts Tinker AFB (Oklahoma City), Fort Sill (Lawton), Altus AFB, and Vance AFB. Tinker is one of the largest Air Force bases in the country.
Does Oklahoma offer education benefits for veterans?
Yes. Oklahoma offers tuition waivers for dependents of disabled/deceased veterans, in-state tuition for all veterans, and Yellow Ribbon Program participation at major universities.
Calculate Your Oklahoma Retirement Income
Ready to Calculate Your Oklahoma Retirement Income?
See exactly what civilian salary you need based on your 100% tax-exempt military retirement and VA disability
Use the Free Calculator →Bottom Line for Oklahoma Military Retirement
Oklahoma offers 100% military retirement tax exemption, one of the lowest costs of living in the nation, and a strong military community around major bases like Tinker AFB and Fort Sill. Combined with affordable housing, education benefits for dependents, and a friendly atmosphere, Oklahoma is an excellent choice for military retirees seeking maximum value for their benefits.