State Tax on Military Pay & Retirement
How each state treats your military income for the 2025 tax year. Active-duty pay, retirement pay, disability comp. 9 no-tax states + 29 full retirement exemptions + 12 partial + exactly one jurisdiction that still fully taxes it (DC). California added a $20,000 partial exclusion starting 2025.
- VA disability compensation is FEDERALLY tax-free. No state taxes it as income.
- Combat Zone Tax Exclusion (CZTE) applies to ALL states. When you're in a designated combat zone, that month's active pay is federally tax-free — and states follow federal AGI, so it's effectively state-tax-free too.
- SCRA protects your tax domicile. Your state of domicile (where you established residency) controls — not the state where you're currently stationed. Update DD Form 2058 with your finance office.
- Spouses get MSRRA protection. The Military Spouses Residency Relief Act lets the spouse claim the same state of domicile as the service member, even if they’ve never lived there.
All 51 jurisdictions, sorted by retirement-pay treatment
Best treatment first (no tax → full exempt → partial → still taxed). Click any state for full details + DoR link.
Service members can choose their state of domicile when they enlist (and change it under specific conditions). Many establish Texas, Florida, or Washington as their domicile because there's no state income tax — and they keep that domicile through 20 years of PCS moves.
Catch: claiming a state of domicile requires intent + ties (driver's license, voter registration, vehicle registration, will, bank account). You can't just check a box. If audited, the state where you actually have ties wins — and the penalties for fraudulent domicile claims are real.
If your home state taxes hard and you're actually moving to a no-tax state on PCS, establish ties there: get the license, register to vote, register the car. SCRA protects your CHOICE — it doesn't make a choice for you.
Frequently Asked Questions
Which state taxes my military pay — where I’m stationed or where I’m from?
Neither is automatic. What controls is your State of Legal Residence (SLR), also called your domicile — the state where you’ve established permanent residency. The state you’re currently stationed in does not get to tax your active-duty pay just because you’re there on orders. Look up your domicile state on its page above to see how it treats military income.
How does the SCRA protect my state of residence when I PCS?
The Servicemembers Civil Relief Act (SCRA) lets you keep your established state of domicile across every PCS move, so a set of orders to a new state doesn’t force a change of tax residency. It protects your choice — it doesn’t choose for you. To change domicile you need real intent and ties, and you update DD Form 2058 with your finance office.
What about my spouse’s state taxes?
The Military Spouses Residency Relief Act (MSRRA) extends similar protection to spouses: a spouse can claim the same state of domicile as the service member and keep it through PCS moves, even in a state where they earn wages. The specifics of how that domicile state taxes the spouse’s income are on that state’s page.
Do states treat active-duty pay and military retirement pay the same way?
Not necessarily. A state can tax active-duty pay, drill pay, and military retirement pay differently — one may be exempt while another is taxed, and exemptions can carry caps or age thresholds. Each state page breaks out the treatment for active-duty pay, Guard/Reserve drill pay, and retirement pay separately so you’re not guessing.
What does this tool cover?
It covers how all 50 states plus the District of Columbia treat military active-duty pay, Guard and Reserve drill pay, and military retirement pay for the 2026 filing year, with a per-state page for each jurisdiction linking to its Department of Revenue. Because state tax law changes annually, verify the current provision with your state DoR before relying on it.