Retirement and military taxes by state, 2026
Short answer
Of the thirteen states below, Tennessee, Texas, Florida, Nevada and Washington have no state income tax on retirement income, so pensions and military retired pay aren't taxed. Arizona and South Carolina fully exempt military retired pay. North Carolina exempts it with 20+ years of service or a medical retirement. Virginia ($40,000 per person), Georgia, Maryland, Colorado (under 55) and Kentucky exempt only part. None of the thirteen taxes Social Security for retirees 65 and older. Where there's no income tax, look closely at property tax and insurance instead.
Not tax advice. Each state page lists its sources and dates.
Federal rules first: Is military retirement taxable? Yes, federally, but VA disability pay and CRSC aren't.
The thirteen states at a glance (2026)
| State | Income tax | Social Security | Military retired pay | Other retirement income | Average property tax |
|---|---|---|---|---|---|
| Kentucky | 3.5% flat | Not taxed | Partly: pre-1998 service exempt, then $31,110 exclusion | $31,110 exclusion per person | ~0.74% |
| Tennessee | None | Not taxed | Not taxed | Not taxed | ~0.52% |
| Texas | None | Not taxed | Not taxed | Not taxed | ~1.40% |
| Florida | None | Not taxed | Not taxed | Not taxed | ~0.78% |
| Nevada | None | Not taxed | Not taxed | Not taxed | ~0.50% |
| Colorado | 4.4% flat | Not taxed at 65+ | Up to $15,000 subtracted under 55; pension subtraction from 55 | Up to $24,000 at 65+ (Social Security counts toward it) | ~0.50% |
| Arizona | 2.5% flat | Not taxed | Not taxed | Taxed (up to $2,500 of U.S./AZ government pension exempt) | ~0.48% |
| North Carolina | 3.99% flat | Not taxed | Not taxed with 20+ years or medical retirement | Taxed (Bailey exceptions) | ~0.66% |
| South Carolina | 1.99% / 5.21% | Not taxed | Not taxed | Up to $10,000 at 65+, plus $15,000 age-65 deduction | ~0.49% |
| Virginia | 2% to 5.75% | Not taxed | Partly: up to $40,000 per person subtracted | Taxed; up to $12,000 age deduction at 65+, income-tested | ~0.78% |
| Georgia | 4.99% flat | Not taxed | Partly: $17,500 under 62 (plus $17,500 with earned income); up to $65,000 under 65 from 2027 | $35,000 (62–64) or $65,000 (65+) exclusion per person | ~0.79% |
| Washington | None on wages or retirement income | Not taxed | Not taxed | Not taxed | ~0.75% |
| Maryland | 2% to 6.5%, plus county 2.25% to 3.30% | Not taxed | Partly: $12,500 under 55, $20,000 from 55 | Pension exclusion at 65+ ($41,200 for 2025, about $40,600 reported for 2026), reduced by Social Security; not IRAs | ~0.92% |
Average property tax: Tax Foundation 2026 state profiles, share of owner-occupied home value.
Property tax breaks for disabled veterans
| State | What a 100% / total and permanent rating gets on the home |
|---|---|
| Texas | Full exemption (100% rate or Individual Unemployability) |
| Florida | Full exemption (100% permanent and total) |
| South Carolina | Full exemption on home and up to 5 acres (total and permanent) |
| Arizona | Full exemption on the primary residence, from tax year 2026 |
| Virginia | Full real estate tax exemption on the home (100% service-connected, permanent and total) |
| Maryland | Full exemption on the home (100% permanent and total, or permanently unemployable) |
| Tennessee | Relief on the tax on the first $175,000 of value (permanent and total) |
| Georgia | $126,526 homestead exemption (2026; 100% rating or paid at the 100% rate) |
| Colorado | 50% of the first $200,000 of value exempt (100% permanent or Individual Unemployability) |
| North Carolina | First $45,000 of value excluded |
| Kentucky | $49,100 exemption (2025–2026) |
| Nevada | $36,400 off assessed value (FY 2026–27) |
| Washington | Property tax exemption program with county income limits: 80%+ rating for 2026 taxes, 40%+ from 2027 |
Looking at a move?
- Military: PCS guides for every installation, with BAH against real neighborhood prices and drive times to the gate.
- Retiring: retirement destinations, showing what your home sale leaves you and the drive to the hospital and VA.
Last reviewed October 21, 2026. Not tax advice.
FAQ
- Which states don't tax military retirement?
- Of these thirteen: Tennessee, Texas, Florida, Nevada and Washington (no income tax on retirement income), plus Arizona and South Carolina (full exemption). North Carolina exempts it with 20+ years of service or a medical retirement. Virginia, Georgia, Maryland, Colorado and Kentucky exempt part.
- Which states don't tax Social Security?
- None of these thirteen taxes Social Security for retirees 65 and older. In Colorado, people 55–64 with higher incomes may pay some.
- Is no income tax always cheaper for retirees?
- Not always. Texas has no income tax but property tax of about 1.40% of home value, and Florida insurance averages about $3,736 a year including wind. Compare the whole picture for the home you'd buy.
- Is military retirement taxable federally?
- Yes, as ordinary income. VA disability compensation and Combat-Related Special Compensation aren't. Federal rules →