Maryland allows many retirees to exclude a portion of their military retirement income from Maryland taxable income.
For tax year 2026:
- If you are under age 55 on the last day of the tax year, you may subtract up to $12,500 of qualifying military retirement income.
- If you are age 55 or older, you may subtract up to $20,000 of qualifying military retirement income.
Maryland defines military retirement income as retirement income, including certain death benefits, received as a result of military service. The subtraction is claimed as a Maryland subtraction from income rather than an exclusion from your federal return.
Who Qualifies?
You may qualify if:
- You received military retirement income during the tax year.
- The income was included in your federal adjusted gross income.
- You meet the applicable age requirement for the subtraction amount.
How to Enter Military Retirement Income in the Program
To enter the subtraction:
- Go to State Section
- Select Edit Maryland Return
- Choose Subtractions From Income
- Select Military Retirement Income Subtraction
- Enter the allowable subtraction amount and continue to save the entry.
Important Note
Military retirement income is different from Maryland's regular Pension Exclusion. Military retirement benefits have their own subtraction provision under Maryland law and should be entered in the Military Retirement Income Subtraction section when applicable.