21 States That Wont Tax Your Retirement Pay

21 States That Wont Tax Your Retirement Pay

Deciding where to retire after your military service is a tough decision. For Veterans who are receiving military retirement pay, it is important to consider how those funds will be taxed before you make a plan to move. So we have compiled a list of states that will not tax your military retirement income!

If you are a Veteran considering making a move, get all the information that you need about your VA Home Loan by joining Savvy Veteran Homebuyers

Let’s dive in! The following states don’t require military members to pay state income tax on military retirement pay because there is simply no state income tax collected. So while this might seem extra kind of them, remember you are getting no additional tax benefits compared to your neighbors:

  • Alaska
  • Florida
  • Nevada
  • New Hampshire (dividend and interest taxes only)
  • South Dakota
  • Tennessee (dividend and interest taxes only but will be phased out in 2021)
  • Texas
  • Washington
  • Wyoming

The following 21 states do have a personal income tax for nonretired service members, but DO NOT tax military retirement income. 

  • Alabama
  • Arkansas
  • Connecticut
  • Hawaii
  • Illinois
  • Iowa
  • Kansas
  • Louisiana
  • Maine
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • New Jersey
  • New York
  • North Dakota (as of 2019)
  • Ohio
  • Pennsylvania
  • Utah (as of 2021)
  • West Virginia (as of 2018)
  • Wisconsin

To ensure that your taxes properly reflect your retirement status, military retirees are encouraged to go to www.dfas.mil/retiredmilitary to change their income tax withholding to zero.

Let us know where you are hoping to retire!

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