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New Jersey Taxes No Military Pension — at Any Age

Military retirement pay and survivor benefit payments are fully excluded from New Jersey gross income tax. There is NO AGE THRESHOLD and no disability requirement, which distinguishes it from New Jersey's ordinary pension exclusion — a 42-year-old retiree gets the same treatment as a 72-year-old. Survivor benefit payments are covered in their own right. One line to watch: a FEDERAL CIVIL-SERVICE PENSION based on military service credit is NOT exempt, so a veteran who went on to a federal civilian career should separate the two.

Verified August 27, 2026

What this benefit is

Military retirement pay and survivor benefit payments are fully excluded from New Jersey gross income tax. There is NO AGE THRESHOLD and no disability requirement, which distinguishes it from New Jersey's ordinary pension exclusion — a 42-year-old retiree gets the same treatment as a 72-year-old. Survivor benefit payments are covered in their own right. One line to watch: a FEDERAL CIVIL-SERVICE PENSION based on military service credit is NOT exempt, so a veteran who went on to a federal civilian career should separate the two.

What it's worth: Military pension and survivor benefit payments fully excluded from New Jersey income

  • FULL EXCLUSION of military retirement pay and survivor benefit payments from New Jersey gross income tax.
  • NO AGE REQUIREMENT and NO DISABILITY REQUIREMENT — unlike New Jersey's general pension exclusion.
  • SURVIVOR BENEFIT PAYMENTS are covered in their own right.
  • A FEDERAL CIVIL-SERVICE PENSION BASED ON MILITARY SERVICE CREDIT IS NOT EXEMPT. Keep the two apart on the return.
  • The saving depends on your pension and New Jersey's rates.

Who is entitled to it

  • You are in one of the groups this reaches.
  • You receive military retirement or survivor benefit pay.
  • New Jersey income tax.

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 the annual NJ-1040
  1. 1Exclude the military pension on the New Jersey return. It is not applied for you.
  2. 2If you also draw a federal civil-service pension, separate it — that one is taxable even where the credit was earned through military service.
  3. 3A surviving spouse receiving SBP should exclude it on the same basis.
  4. 4If you are under the ordinary pension exclusion's age threshold, exclude anyway. This exclusion has no age test.
  5. 5Check earlier returns and ask the Division of Taxation about amending if the exclusion was missed.
Form
New Jersey NJ-1040
File with
New Jersey Division of Taxation
Annual
Claimed once a year.
Worth knowingNew Jersey's general pension exclusion is age- and income-tested. The military one is neither, so a retiree in their forties should not be steered by advice written about the general rule.

Sources

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