Thanks to new laws that were passed, military retirement pay will now be exempt, or partially exempt, from state income taxes in six additional states.
Over 300,000 military retirees will benefit from the new laws and see extra money in their pockets.
Here are the six states that decided to give military retirees a tax break:
- New Mexico
- Rhode Island
- South Carolina
The changes will take effect in 2022.
Oklahoma, Rhode Island, and South Carolina announced that military retirement income will be fully tax free.
New Mexico, Vermont and Virginia have slightly different rules. Here they are, via Military.com:
- New Mexico: Beginning in 2022, up to $10,000 of military retirement is tax free. That amount increases to $20,000 in 2023, and to $30,000 until at least 2026, according to a governor’s press release.
- Vermont: Beginning in 2022, up to $10,000 in retirement income is tax free for those with a gross income less than $50,000 for single filers or $65,000 for joint filers, according to a state legislature press release.
- Virginia: In 2022, up to $10,000 in retirement pay is tax free for retirees 55 and older. That amount increases by $10,000 each year until 2025, when up to $40,000 is deductible, according to a state assembly press release.
Six more states deciding to not tax military retirement income is a good move in the right direction, hopefully the remainder of US states will follow suit soon.