Active-duty pay
Taxed
Active-duty pay taxable to CT residents; combat zone pay is exempt.
State Guide · CT
Connecticut — Military Tax Treatment
Connecticut taxes active duty and Guard drill pay throughout your service career but fully exempts retirement. For Guardsmen, plan on paying CT income tax on drill pay until you start drawing retirement.
Tax treatment at a glance
Guard & Reserve drill pay
Taxed
Guard and Reserve drill pay is taxable Connecticut income. SCRA applies during federal activation orders but not routine drill.
Military retirement pay
Fully Exempt
Military retirement pay 100% exempt.
The numbers · verified for tax year 2025
Top marginal rate
6.99%
Retirement-pay exemption
Full
100% of military retirement pay is deductible from Connecticut AGI (fully exempt) under CGS § 12-701(a)(20)(B)(xvi), regardless of income; also covers qualifying survivor benefits — no cap, no age requirement. (Note: some third-party guides wrongly list CT military retirement as taxed; the state OLR report confirms the full exemption.)
Standard deduction
Connecticut has no standard deduction (it uses personal exemptions and credits). The rate schedule tops out at 6.99%.
VA disability compensation
Always tax-free
Federally tax-free under 38 USC § 5301. No state taxes VA disability compensation as income — Connecticut included.
Survivor Benefit Plan (SBP)
Follows retirement
Connecticut exempts military retirement — SBP annuities are generally exempt under the same provision.
Federal rules that override state law
SCRA — Servicemembers Civil Relief Act
Active-duty servicemembers pay state income tax only to their state of legal domicile — not the state where they are stationed. If you are from Texas and stationed in Connecticut, Connecticut cannot tax your military pay. This applies during all active duty periods and during Guard/Reserve mobilizations on federal (Title 10) orders.
MSRRA — Military Spouses Residency Relief Act
Military spouses can maintain their home-state domicile even when living in a different state due to their servicemember's orders. A spouse who is a Texas resident following their servicemember to Connecticut can keep Texas as their tax domicile and avoid Connecticut state income tax on their wages.
Guard & Reserve — the SCRA gap
SCRA pay protections apply during federal (Title 10) activation orders. During routine drill weekends and state-only activations, Guard and Reserve members are state residents serving in their home state — SCRA does not protect their drill pay from state income tax. Whether Connecticut exempts that pay is the state-specific question answered above.
Filing watch-outs
- 01Combat zone pay: use CT Schedule 1 to report the federal exclusion
- 02Retirement exemption: reported on CT-1040 Schedule 1, Part I
Veteran-specific tax benefits
Property tax exemption + additional benefits for disabled vets.
Official authority
https://portal.ct.gov/DRS ↗State tax law changes annually. Verify current rules with the Connecticut Department of Revenue before making any tax decision.
Connecticut military tax — common questions
Does Connecticut tax military retirement pay in 2026?
Connecticut fully exempts military retirement pay. Military retirement pay 100% exempt.
Does Connecticut tax active-duty military pay?
Connecticut taxes active-duty military pay for state residents. Active-duty pay taxable to CT residents; combat zone pay is exempt. Under the SCRA, Connecticut can only tax the military pay of service members who are legally domiciled in Connecticut — not those merely stationed there.
Does Connecticut tax National Guard and Reserve drill pay?
Connecticut taxes Guard and Reserve drill pay. Guard and Reserve drill pay is taxable Connecticut income. SCRA applies during federal activation orders but not routine drill.
Is VA disability compensation taxed in Connecticut?
No. VA disability compensation is federally tax-free under 38 U.S.C. § 5301, and no state — including Connecticut — taxes it as income.
If I'm stationed in Connecticut but claim another state, can Connecticut tax my military pay?
No. Under the Servicemembers Civil Relief Act (SCRA), active-duty pay is taxable only by your state of legal domicile, not the state where you are stationed. If your domicile is elsewhere, Connecticut cannot tax your active-duty military pay. Military spouses get the same protection under the MSRRA.
Related tools
Other state guides