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Military Retirement Pay Subtracted — or a Credit, Not Both

Military retirement pay comes out of Minnesota taxable income — unless the credit for past military service is worth more to you, because the statute makes you choose.

Verified August 19, 2026

What this benefit is

Military retirement pay comes out of Minnesota taxable income — unless the credit for past military service is worth more to you, because the statute makes you choose.

What it's worth: Your military retired pay, subtracted from Minnesota taxable income

  • The saving is your marginal state rate applied to the amount subtracted, so it depends on your bracket.

Who is entitled to it

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

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. 1Compare the subtraction against the credit for past military service under §290.0677 before you file — the statute allows one or the other, never both.
  2. 2Claim whichever you chose on your Minnesota return for the year.
File with
The Minnesota Department of Revenue, with your annual return
Documents you will need
form 1099 r
Annual
Claimed once a year.
CorrectionThe subtraction and the credit for past military service under §290.0677 are alternatives — the statute limits the subtraction to individuals who do not claim the credit. Guidance that lists both without saying so invites a misfiled return, and a retiree who never compares the two may be taking the smaller one.
Worth knowingThe subtraction covers retirement pay computed under the named federal retirement provisions, including retainer pay. It must be in your federal adjusted gross income to be subtracted — pay that federal law already excludes is not subtracted twice.

Sources

Why only one source type: The statute states the subtraction and the either-or rule against the credit directly. The Department of Revenue's own page on the subtraction sits behind a bot wall (a ShieldSquare validation redirect) and could not be read, which we record rather than citing a page we never saw.

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