States that don’t tax military retirement pay include:
- Alabama.
- Arkansas.
- Connecticut.
- Hawaii.
- Illinois.
- Iowa.
- Kansas.
- Louisiana.
What are the best states for military retirees?
Here are the best states for military retirees
- Virginia.
- South Carolina.
- Florida.
- South Dakota.
- Alaska.
- Alabama.
- Maryland.
- Wyoming.
Are there any states that do not tax military pay?
Georgia, for example, has 13 military bases but no specific tax exemption for military retirement pay. But Alabama, which is just across the Chattahoochee River and a few miles from Fort Benning, exempts military retirement income from state taxes, and Florida has no state income tax.
Do you have to pay taxes when you retire from the military?
Some states don’t charge income tax on military retired pay. In all states, VA & Social Security disability payments are tax-free. If you have issues with retired pay and state income tax, including changing your withholding amount, you can always contact DFAS for assistance.
Are there any states that do not tax retirement income?
Some states with low or no income taxes have higher property or sales taxes. For example, while Illinois does not tax retirement income, it has one of the highest sales and property taxes in the U.S. Other low-tax states may have fewer programs that you might find helpful, such as senior centers and public transportation.
Do you have to pay taxes on a military pension in Kentucky?
In Kentucky, military pensions are fully exempt if the person retired before 1997. The states can be divided into four categories: no state income tax; exempts military pension income from state taxes; offers special tax treatments for military pensions, and treats military retirement pay as ordinary taxable income.
