Is My Military Income Taxable to Massachusetts?

Whether your military income is taxable in Massachusetts depends on your residency status.

Massachusetts Residents

If you're a Massachusetts resident, your military pay is generally taxable by Massachusetts, no matter where you are stationed or where the income was earned.

Massachusetts considers you a resident if Massachusetts remains your legal domicile, even while serving outside the state.

Nonresidents Stationed in Massachusetts

If you're a nonresident of Massachusetts who is stationed in Massachusetts under military orders, your military pay is not taxable by Massachusetts.

However, any non-military income earned in Massachusetts, such as wages from a civilian job, may be taxable and could require filing a Massachusetts Nonresident Return (Form 1-NR/PY).

Military Spouses

Under federal military spouse residency laws, a military spouse may be able to keep or elect a residency outside Massachusetts. When a servicemember and spouse have different residency statuses, separate Massachusetts returns may be required.

Military Pension Income

Massachusetts does not tax the following military retirement benefits:

• Noncontributory military retirement pay from the U.S. uniformed services
• Survivorship benefits received from the U.S. uniformed services
• Certain contributory federal government pension and retirement plans

These benefits are generally exempt from Massachusetts income tax.

Program Entry

If military pension income is being included in Massachusetts taxable income, you can enter an adjustment in the Massachusetts return:

1. State
2. Massachusetts Return
3. Deductions
4. Enter the deductible amount of qualified contributory pension income from another state or political subdivision included in income
5. Enter the qualified amount
6. Continue

Important Notes

• Massachusetts residents must report and pay tax on military wages, regardless of where they were earned.
• Nonresidents stationed in Massachusetts do not pay Massachusetts tax on military wages.
• Military retirement pay and qualifying military survivorship benefits are generally exempt from Massachusetts income tax.