Taxation of Military Retirement Pay
The taxation of military retirement pay refers to the process by which military pension benefits received by retired service members are subject to federal and, in some cases, state income taxes.
In the United States, military retirement pay is considered taxable income under federal law. However, certain states may offer exemptions or reduced taxation on military pensions. The amount that is taxable can depend on factors such as the length of service, the type of retirement (e.g., regular retirement, disability retirement), and the specific state laws in place.
For example, while federal tax applies, some states like Florida and Texas do not tax military retirement pay at the state level. Retired service members need to report their military retirement income on their tax returns, and they may also be eligible for specific deductions or credits, depending on their situation and the jurisdiction in which they reside.
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