Military Retirement Credit — 4.5% of the Pay, Not an Exclusion
A nonrefundable income tax credit equal to 4.5% of taxable military retirement pay, including a survivor benefit received from a deceased retiree. It cannot be claimed alongside the general retirement credit or the Social Security Benefits Credit. A survivor of a member who died on active duty claims a different credit instead.
Verified August 25, 2026
What this benefit is
A nonrefundable income tax credit equal to 4.5% of taxable military retirement pay, including a survivor benefit received from a deceased retiree. It cannot be claimed alongside the general retirement credit or the Social Security Benefits Credit. A survivor of a member who died on active duty claims a different credit instead.
What it's worth: 4.5% of taxable military retirement pay, as a nonrefundable credit
- The tax commission describes a credit for taxable military retirement pay received by the taxpayer or, on a joint return, the spouse.
- Military retirement pay is described as retirement pay related to service in the armed forces, including retirement pay received by a survivor of a deceased servicemember.
- Survivor benefits from a member who died on active duty, or during inactive-duty training, are claimed under the separate Military Survivor Benefits Credit — UCA 59-10-1036, code AA — not under this one. SBP received from a deceased retiree stays here.
- The credit is calculated as taxable military retirement pay multiplied by 4.5 percent, with one worksheet completed for each person claiming it.
- It is nonrefundable, so it reduces tax due and any excess is not paid out.
- It may not be claimed by a taxpayer, or a spouse on a joint return, who claims the general retirement credit, nor alongside the Social Security Benefits Credit (code AH).
- Only military retirement income included in adjusted gross income on the current return counts, so no dollar figure is given here.
Who is entitled to it
- The credit reaches the retiree, and a survivor receiving survivor benefits.
- Your home is in Utah.
Not sure whether that describes you?
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How to claim it
Deadline: With your return- 1Work out the arithmetic before you decide it does not matter: the credit is 4.5 percent of taxable military retirement pay, not the pay itself removed from income.
- 2Compare it with the general retirement credit before choosing. You cannot claim both, and on a joint return neither spouse may claim the other one.
- 3Complete a worksheet for each person claiming — the commission is explicit that one worksheet per claimant is required.
- 4Count only military retirement income that is in adjusted gross income on the return you are filing.
- 5A survivor receiving survivor benefits from a deceased servicemember is inside the definition. That is worth checking if you assumed the credit ended with the retiree.
- 6It is nonrefundable. If the credit exceeds tax due, the excess is not refunded, so plan withholding accordingly rather than counting on a cheque.
- Form
- The credit worksheet with the state income tax return
- File with
- Utah State Tax Commission
- Annual
- Claimed once a year.
Sources
- authority · published policyUtah State Tax Commission — Military Retirement Credit, citing Utah Code §59-10-1043 (4.5 percent of taxable military retirement pay; survivor benefits included; nonrefundable; not combinable with the Retirement Credit)
- operating · published policyUtah Department of Veterans and Military Affairs — 2026 resource guide, which describes the same benefit as allowing retirees to exclude military retirement pay from state income taxes
This finder provides an informational match, not a government eligibility determination. The responsible agency decides your application.