Military retirees in Arizona, Indiana, Nebraska, North Carolina and Utah will no longer have to pay taxes on their military retirement pay, according to a Military.com review of new state laws. Indiana and Nebraska retirees’ tax-free status will kick in for the 2022 tax year, while the other states’ retirees will see the benefit applied to their 2021 taxes.
According to the analysis, the changes mean that 26 states will no longer tax military retirement income. Nine states offer partial exemptions. Six states and the District of Columbia fully tax military retirement. Nine states don’t have income taxes at all.
Air Force photo by Wayne Gray