MOAA National serves in an advisory capacity for state-specific issues such as income tax exemption. Please contact your local MOAA council or independent chapter as state legislation must originate at the state level.
Retired servicemembers and their survivors in several states will benefit from tax code changes enacted for the 2022 tax year, with several states approving full exemptions for military retired pay.
Other states saw increases to existing exemptions, or partial exemptions based on age or income. The latest information on your state is available at MOAA’s Military State Report Card and Tax Guide.
Here’s a look at some of the states where tax code changes are coming the next time you file. These changes deal with laws already on the books for the 2022 tax year and beyond; MOAA members in many states are continuing to advocate for exemptions – reach out to your local council or chapter for more information.
Note: The below exemptions do not cover retirees from the commissioned corps of the U.S. Public Health Service or NOAA. One state did make a change on behalf of those retirees in 2022: North Carolina passed an amendment to this year’s appropriations act extending the 2021 state tax exemption on military retiree and surviving spouse benefits to USPHS and NOAA retirees. MOAA Councils and Chapters are encouraged to include USPHS and NOAA when advocating for these tax changes. As uniformed services but not part of the "Armed Forces," they can be excluded unknowingly by lawmakers. Surviving spouses should also be included in the advocacy efforts.
Oklahoma: A law signed May 26 by Gov. Kevin Stitt offers full exemption for military retired pay, improving on a previous 75% tax break.
Rhode Island: The state’s FY 2023 budget, signed July 21 by Gov. Dan McKee, exempts all military retired pay from state taxes beginning in tax year 2023 (not 2022).
South Carolina: A law signed May 13 by Gov. Henry McMaster exempts all military retirement income from state taxes beginning with the 2022 tax year.
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Delaware: A law signed July 21 by Gov. John Carney extends the state’s tax exemption for military retirees under 60 to $12,500, up from $2,000, beginning in the 2022 tax year.
Georgia: A law signed April 18 by Gov. Brian Kemp exempts up to $35,000 of military income for residents under age 62. Georgia residents ages 62 to 64 can claim a $35,000 exemption on any retirement income, and those 65 and over can exempt $65,000.
New Mexico: A law signed March 8 by Gov. Michelle Lujan Grisham exempts $10,000 in military retired pay for tax year 2022, $20,000 for tax year 2023, and $30,000 for tax years 2024 through 2026.
Vermont: A law signed May 27 by Gov. Phil Scott provides a tax exemption on $10,000 of military retirement pay in 2022 for residents with gross incomes of $50,000 or less ($65,000 or less for those married but filing a joint tax return).
Virginia: The state’s two-year budget, signed June 21 by Gov. Glenn Youngkin, exempts the first $10,000 in military retirement income in the 2022 tax year, the first $20,000 in tax year 2023, the first $30,000 in tax year 2024, and $40,000 in 2025 and beyond. Retirees must be age 55 or older to claim the exemption.
MOAA will continue tracking state tax changes in the coming year, including details on legislation moving through various state chambers. Visit MOAA.org/news for regular updates. Have questions about or additions to the above list, or have news from your state regarding tax exemptions? Contact us at email@example.com with “State Tax” in the subject line.
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