Active-duty pay
Taxed
Active-duty pay taxable to NY residents; combat zone exempt.
State Guide · NY
New York — Military Tax Treatment
New York fully exempts military retirement but active duty and Guard pay rules are more nuanced. The NY military pay subtraction (IT-255) has multiple categories — get clarity from NY Tax on your specific situation.
Tax treatment at a glance
Guard & Reserve drill pay
Partially Exempt
New York has specific provisions for National Guard pay — pay received during state emergency active duty orders is generally exempt. Routine drill pay rules are complex; verify current treatment with NY Tax using Form IT-255.
Military retirement pay
Fully Exempt
Military retirement pay fully exempt.
The numbers · verified for tax year 2025
Top marginal rate
10.9%
Retirement-pay exemption
Full
Military retirement pay is 100% exempt from New York State, NYC, and Yonkers income tax — no cap, no age limit (subtraction S-119 on Form IT-225).
Standard deduction
For 2025 the standard deduction is $8,000 single / $16,050 married filing jointly. The 10.9% top rate applies only to very high incomes (over $25M); millionaire brackets sit above 9%.
VA disability compensation
Always tax-free
Federally tax-free under 38 USC § 5301. No state taxes VA disability compensation as income — New York included.
Survivor Benefit Plan (SBP)
Follows retirement
New York exempts military retirement — SBP annuities are generally exempt.
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 New York, New York 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 New York can keep Texas as their tax domicile and avoid New York 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 New York exempts that pay is the state-specific question answered above.
Filing watch-outs
- 01NY Form IT-255 for military service subtraction — rules vary by residency status and type of service
- 02Establish non-NY domicile if permanently stationed elsewhere to avoid NY tax on military pay
- 03Guard members: state emergency activation pay may be exempt; routine drill is complex — verify with NY Tax
Veteran-specific tax benefits
Alternative veteran property tax exemption.
Official authority
https://www.tax.ny.gov/ ↗State tax law changes annually. Verify current rules with the New York Department of Revenue before making any tax decision.
New York military tax — common questions
Does New York tax military retirement pay in 2026?
New York fully exempts military retirement pay. Military retirement pay fully exempt.
Does New York tax active-duty military pay?
New York taxes active-duty military pay for state residents. Active-duty pay taxable to NY residents; combat zone exempt. Under the SCRA, New York can only tax the military pay of service members who are legally domiciled in New York — not those merely stationed there.
Does New York tax National Guard and Reserve drill pay?
New York partially taxes Guard and Reserve drill pay. New York has specific provisions for National Guard pay — pay received during state emergency active duty orders is generally exempt. Routine drill pay rules are complex; verify current treatment with NY Tax using Form IT-255.
Is VA disability compensation taxed in New York?
No. VA disability compensation is federally tax-free under 38 U.S.C. § 5301, and no state — including New York — taxes it as income.
If I'm stationed in New York but claim another state, can New York 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, New York cannot tax your active-duty military pay. Military spouses get the same protection under the MSRRA.
Related tools
Other state guides