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Military Retirement Subtraction — $12,500 Under 55, $20,000 at 55 and Over

A capped subtraction of military retirement income, and the cap depends on your age on the last day of the tax year: up to $12,500 if you are under 55, and up to $20,000 if you are 55 or older. The record previously published only the lower figure, which understates what most military retirees can subtract. A separate general pension exclusion may also be available to filers aged 65 or over, and to those who are totally disabled.

Verified August 25, 2026

What this benefit is

A capped subtraction of military retirement income, and the cap depends on your age on the last day of the tax year: up to $12,500 if you are under 55, and up to $20,000 if you are 55 or older. The record previously published only the lower figure, which understates what most military retirees can subtract. A separate general pension exclusion may also be available to filers aged 65 or over, and to those who are totally disabled.

What it's worth: Up to $12,500 of military retirement subtracted under 55, or $20,000 at 55 and over

  • The cap is $12,500 for taxpayers under 55 on the last day of the taxable year, and $20,000 for taxpayers 55 or older.
  • The saving is your marginal state rate applied to the amount excluded, so it depends on your bracket. We do not publish a figure that would misstate it.
  • A separate general pension exclusion exists for filers aged 65 or over and for those who are totally disabled. It is not the same relief and is claimed separately.

Who is entitled to it

  • You receive military retired pay.
  • Your home is in Maryland.

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: April 15, with your return
  1. 1Claim the subtraction or deduction on your state return for the year.
File with
Your state revenue department, with your annual return
Documents you will need
form 1099 r
Annual
Claimed once a year.
CorrectionMaryland is sometimes listed alongside the states that exempt military retirement entirely. It does not — the subtraction is capped, and the cap has been raised repeatedly over the years rather than removed.
Known gapWe verified $12,500 for the 2025 tax year. The figure has moved several times and an age-banded higher amount has applied in some years, so check the current form rather than relying on this.

Sources

Why only one source type: We publish this record to describe how the state taxes military income rather than to route a filing, so the administering department's own guidance is sufficient.

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