Guard and Reserve Drill Pay Is Not Taxed by Hawaii, Up to E-5
Hawaii excludes from gross income the pay a serving reserve or Guard member receives for duty equivalent to forty-eight drills — twelve weekends — and fifteen days of annual duty, valued at up to the E-5 pay grade after eight years of service. It reaches serving members of the Army, Navy, Air Force, Marine Corps and Coast Guard reserves and the Hawaii National Guard. It does not reach separated veterans.
Verified August 27, 2026
What this benefit is
Hawaii excludes from gross income the pay a serving reserve or Guard member receives for duty equivalent to forty-eight drills — twelve weekends — and fifteen days of annual duty, valued at up to the E-5 pay grade after eight years of service. It reaches serving members of the Army, Navy, Air Force, Marine Corps and Coast Guard reserves and the Hawaii National Guard. It does not reach separated veterans.
What it's worth: Drill and annual duty pay excluded, valued up to the E-5 grade
- The exclusion covers compensation for duty equivalent to FORTY-EIGHT DRILLS — twelve weekends — and FIFTEEN DAYS of annual duty.
- It is valued at up to the E-5 pay grade after eight years of service. Pay above that valuation is not excluded, so a senior NCO does not exclude all of it.
- It reaches serving members of the Army, Navy, Air Force, Marine Corps and Coast Guard reserves, and the Hawaii National Guard.
- It does NOT reach separated veterans. This is a serving-member provision.
- The saving is your marginal Hawaii rate on the excluded amount, so it depends on your bracket.
Who is entitled to it
- You are a serving reserve or Guard member.
- You file in Hawaii.
Not sure whether that describes you?
Answer a few questions about this benefit specifically — we only ask what this one actually depends on, and we stop as soon as we know.
How to claim it
Deadline: With your annual Hawaii return- 1Claim the exclusion on your Hawaii income tax return for the year.
- 2Work out the valuation cap: it is up to the E-5 grade after eight years of service, not your actual grade. Above that, the excess is taxable.
- 3Count the qualifying duty — forty-eight drills and fifteen days of annual duty is the measure.
- 4If you have separated, this is not available to you. Look at the military pension exclusion instead.
- Form
- Claimed on your Hawaii return
- File with
- Hawaii Department of Taxation, with your annual return
- Annual
- Claimed once a year.
Sources
- authority · statuteHRS chapter 235 — exclusions from gross income
- operating · published policyHawaii Department of Taxation
This finder provides an informational match, not a government eligibility determination. The responsible agency decides your application.