I'm retired military, have a disability rating of 90%, does this give me a tax break? Is military retirement tax free because of my disability rating?

[DanielV01 · Accepted solution]

It depends.  Military disability payments (as compared to military retirement) typically are considered tax free income and are not reported on any tax reporting documents, because they are not included in taxable income.  Military retirement, however, would be reported on a 1099-R.  Any amounts reported in box 2a (taxable distribution) are taxable on the Federal return.  For the state return, it depends on the state.  Some states tax military retirement normally, some exempt a portion of it, and some states do not tax it at all.