states that don't tax military pensions
By: Veronica Rose, Principal Analyst. You want to know what states do not tax U.S. government military retirement income (pension). Thirteen of the 42 jurisdictions that levy an income tax do not tax U.S. government military pension. They include Massachusetts, New Jersey, New York, and Pennsylvania in the Northeast. Another 20 of the 42 jurisdictions, provide state tax exclusion for military pension.
Three statesâKentucky, North Carolina, and South Carolinaâfully exempt some military retirees' pension from tax and allow other military retirees an income exclusion (see Table 1). Connecticut is among six states that do not exclude any portion of military retirement income from taxes. The others are: California, Nebraska, Ohio, Rhode Island, and Vermont. Table 1 shows how all 50 jurisdictions treat military pension for tax purposes.