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  • J. Olson

Military Retirees in 5 More States Will No Longer Have to Pay Military Retirement Tax

Thanks to new laws that were passed in 2021, military retirement pay will now be tax free in five more states.

Over 100,000 military retirees will benefit from the new laws and see extra money in their pockets.

Here are the five states that decided to no longer tax military retirement pay:

  • Arizona

  • North Carolina

  • Utah

  • Indiana

  • Nebraska

Military retirees living in Arizona, North Carolina and Utah will see the changes take effect immediately.

For those who live in Indiana or Nebraska, the changes will become effective with the 2022 tax year, according to

The addition of these five states brings the total number of states that do not tax military retirement income to 26.

Here’s an updated list of all U.S. states that don’t tax military retirement pay:

  • Alabama

  • Arizona

  • Arkansas

  • Connecticut

  • Hawaii

  • Illinois

  • Indiana

  • Iowa

  • Kansas

  • Louisiana

  • Maine

  • Massachusetts

  • Michigan

  • Minnesota

  • Mississippi

  • Missouri

  • Nebraska

  • New Jersey

  • New York

  • North Carolina

  • North Dakota

  • Ohio

  • Pennsylvania

  • Utah

  • West Virginia

  • Wisconsin

Five more states deciding to not tax military retirement income is a good move in the right direction, hopefully more states will follow suit soon.


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