Which states tax my Active Duty or Reserve military pay?

By MyAirForceBenefits Staff

As tax deadlines get closer, it is a good time to look at the state income tax requirements for Service members on active duty or reserve status. Tax laws often change, so be sure to revisit the tax requirements of your state of residency, and any state from which you receive income, before filing.

It is important to keep in mind that even though a state may not tax your military income, it does not necessarily mean that you do not have to file. Often, the exclusion of military income is from a deduction or subtraction and requires forms, in addition to the main tax form to be completed.

The paragraphs below contain information on which states fully exempt, partially exempt, or fully tax military pay. Be aware that in some cases military pay may be fully exempt only if certain conditions are met. Also, the tax laws for active-duty military pay may be different from those for National Guard and Reserve pay. For instance, while active-duty military pay may be fully exempt, National Guard and Reserve pay may not be exempt or may require that additional conditions be met to qualify for a deduction. For detailed information on each state, visit your state’s fact sheet in the MyAirforceBenefits Benefit Library and your state’s income tax or department of revenue site for individual income tax information for tax year 2025.

States with No Individual Income Tax/Military Income Fully Exempt

 States that Fully Exempt Military Income (some states require conditions be met)

  • Arizona: No tax on military pay received by Service members serving in the active or reserve components of the U.S. Armed Forces
  • Arkansas: No tax on military pay received by Service members serving in the active or reserve components of the U.S. Armed Forces
  • Colorado: Resident living outside the 50 U.S. states for ≥305 days of the calendar year may file as Nonresident so military income is excluded from state tax. Pay received by active-duty service members for service in a combat zone that is exempt from federal taxes is also exempt from Colorado income taxes.
  • Illinois: All pay included in federal adjusted gross income (AGI) is not taxed but income excluded from AGI is taxed
  • Indiana: No tax on military pay received by Service members serving in the active or reserve components of the U.S. Armed Forces
  • Iowa: No tax on military pay received by Service members on active duty in the U.S. Armed Forces
  • Kentucky: All military pay received for service is exempt
  • Michigan: Active-duty military pay is exempt; Thrift Savings Plan (TSP) distributions are subject to state taxes
  • Minnesota: The state does not tax military pay received by resident Service members serving in the active or reserve components of the U.S. Armed Forces
  • Missouri: Service members in the active or reserve components can deduct their military pay from their Missouri taxable income as long as their pay is included in federal AGI
  • Montana: The following can be excluded from income tax: base pay, special pay, and incentive pay for active-duty service members. National Guard and reserve component pay to service members on state or federal active-duty orders.
  • New Mexico: Active-duty military pay is exempt
  • North Dakota: No tax on military pay received by Service members serving in the active or reserve components of the U.S. Armed Forces
  • Oklahoma: No tax on military pay received by Service members serving in the active or reserve components of the U.S. Armed Forces

States that Fully Exempt Military Income when Living Outside the State

  • California: All active-duty military pay for residents is exempt if not stationed in CA
  • Connecticut: All military pay not taxable and considered a nonresident for tax purposes if all the following are true: do not maintain permanent residence in CT, maintain permanent residence outside CT, and spent < 30 days in CT
  • Idaho: Military pay earned while stationed outside Idaho for 120 days consecutive and uninterrupted is not taxed
  • Maine: Resident, active-duty military pay earned outside of Maine is not taxed
  • New York: All active-duty military pay is exempt IF you meet conditions of non-resident eligibility – do not maintain a permanent residence in the state during the tax year, maintain a permanent residence outside the state during the entire tax year, and spend 30 days or less in state during tax year
  • Ohio: Resident NOT stationed in OH serving on active duty can deduct military pay from OH income taxes; military pay must be included in Federal AGI
  • Oregon: Residents stationed in Oregon may qualify for a subtraction of up to $6,000; Residents not stationed in Oregon are not taxed and pay earned by National Guard or reserve component service members assigned away from home for 21 days or more are not taxed.
  • Pennsylvania: Resident NOT stationed in PA, military income exempt; Resident stationed in PA, all military income taxed
  • Vermont: Resident living in VT, all military pay is taxable; Residents living outside VT on full-time active duty all military pay is exempt; National Guard and Reserve on drilling/training status, may be eligible for In-State Unit Training Exemption of up to $2,000

 States that Partially Exempt Military Income

  • Alabama: Pay received while serving in a designated combat zone is exempt; military allowances for quarters, subsistence, uniforms, and travel also exempt
  • Hawaii: Residents may exclude up to $8,636 of HI National Guard or Reserve duty pay from income
  • Louisiana: If stationed out of state on active duty for > 120 consecutive days, may be eligible to exempt up to $50,000 of military income
  • Maryland: If military pay is < $30,000, may subtract up to $15,000 earned outside U.S. States or possessions
  • Massachusetts: Pay received while serving in a designated combat zone or hazardous duty location that is excluded from the Service member’s federal income is also excluded from MA state income tax
  • Mississippi: Pay received while serving in a designated combat zone is exempt; the first $15,000 of eligible compensation from National Guard or Reserve salary is exempt
  • Nebraska: National Guard members can exclude 100% of pay from state income taxes if they service in the following statuses: active duty, Active Guard Reserve (AGR), Active Duty for Operational Support (ADOS), State active duty, and Federal Dual-Status Technician
  • New Jersey: Pay received while serving in a designated combat zone or while hospitalized due to an injury received in a combat zone are exempt
  • North Carolina: Pay received while serving in a designated combat zone or hazardous duty location that is excluded from the Service member’s federal income is also excluded from North Carolina state income tax
  • South Carolina: Pay received while serving in a designated combat zone location that is excluded from the Service member’s federal income is also excluded from South Carolina state income tax
  • Virginia: If on active duty for ≥ 90 consecutive days and military pay totals < $30,000, may be eligible to subtract up to $15,000; National Guard pay for active or inactive service in the Virginia National Guard National Guard ranks of Colonel (O-6) and below, can subtract salaries for active and inactive service for up to 39 days of service or $5,500, whichever is less; non-residents must pay state tax on any pay received in the state that is not active duty pay
  • West Virginia: Filing requirements depend on state residency and whether military member and/or spouse spend more than 30 days in the state during the tax year; some deductions allowed for active duty performed for domestic security duty, if income was included in federal AGI; National Guard must be called to active duty under Title 10
  • Wisconsin: Deduction for National Guard and Reserve pay received for Title 10 or Title 32 active duty or special state service

 States that Fully Tax Military Income

  • Delaware
  • District of Columbia
  • Georgia
  • Kansas: Nonresidents stationed in Kansas must file a state return IF you received income from Kansas sources
  • Rhode Island
  • Utah: All income included in federal adjusted gross income is automatically included in Utah income; income exempt from federal taxation is also exempt from Utah income tax