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Retirement Benefits Deduction — Military Pensions at 65, or 62 Disabled

A military pension qualifies for the state retirement benefits deduction once the recipient is 65 — or 62 and disabled. For tax year 2025 the cap is $48,216 single and $72,324 married filing jointly, reduced dollar-for-dollar by Social Security and Railroad Retirement received.

Verified August 20, 2026

What this benefit is

A military pension qualifies for the state retirement benefits deduction once the recipient is 65 — or 62 and disabled. For tax year 2025 the cap is $48,216 single and $72,324 married filing jointly, reduced dollar-for-dollar by Social Security and Railroad Retirement received.

What it's worth: Up to $48,216 (single) / $72,324 (joint) deducted for TY2025 — minus Social Security received

  • The caps are recalculated by the state every year; the figures here are the 2025 instruction booklet values.
  • The saving is the flat state rate (5.3% for 2025) on the amount actually deducted.

Who is entitled to it

  • You receive military retired pay.
  • Your home is in this state.

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 return
  1. 1Check the age gate first: you must be at least 65, or at least 62 AND disabled, in the tax year.
  2. 2Enter the cap for your filing status ($48,216 single / $72,324 joint for 2025), then subtract the Social Security and Railroad Retirement benefits you received — what remains, up to your actual military pension, is the deduction.
  3. 3A younger military retiree gets nothing from this section — the deduction has no under-62 route, whatever the disability rating.
Form
Form 39R (residents) or 39NR, Section B — Subtractions
File with
State Tax Commission, with your annual return
Annual
Claimed once a year.
CorrectionThis is not a veteran-specific exemption and it is not unlimited: CSRS and FSRDS civil pensions and certain police and firefighter pensions qualify on identical terms, the cap binds, and Social Security received eats the cap dollar for dollar. Summaries that say the state "exempts military retirement" are describing this capped, age-gated, offset deduction.

Sources

Why only one source type: Both sources are the administering agency itself — its deduction page for the mechanics and its instruction booklet for the year’s caps. The statute site refused connections during this pass.

This finder provides an informational match, not a government eligibility determination. The responsible agency decides your application.