The US Uniformed Services retirement benefit deduction is for military retirement, and it refers to the non-tax status in certain states.
- Eight states have no state income tax. New Hampshire taxes only dividends and interest income.
- Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming
- Twenty-six states have state income taxes, but they don't tax military retirement benefits:
- Alabama, Arizona, Arkansas, Connecticut, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, and Wisconsin.
- Eleven states tax military retirement benefits, but only partially.
- These states include Colorado, Delaware, Georgia, Idaho, Kentucky, Maryland, New Mexico, Oregon, South Carolina, Virginia, and West Virginia. The District of Columbia also taxes military benefits partially.
- Five states tax military retirement pay fully and offer little to no tax benefits for retirement income:
- California, Montana, Rhode Island, Utah, and Vermont.
See the TurboTax article States that Don't Tax Military Retirement
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