Military retirement income is generally not taxable in Massachusetts.
Massachusetts exempts noncontributory pension income and survivorship benefits received from the U.S. uniformed services from state income tax. This includes retirement benefits received from:
- U.S. Army
- U.S. Navy
- U.S. Marine Corps
- U.S. Air Force
- U.S. Coast Guard
- Commissioned Corps of the Public Health Service
- National Oceanic and Atmospheric Administration (NOAA)
How Do I Exclude Military Retirement Income in the Program?
The exemption is not automatically calculated when preparing a Massachusetts return. If your military retirement income is included in your federal taxable pension amount, you'll need to manually remove the exempt portion.
In the program, follow these steps:
- State
- Massachusetts Return
- Income Subject to Tax
- Exempt Pensions and Annuities
- Enter the amount of government pensions and annuities exempt under Massachusetts law
The exempt military retirement income will then be excluded from Massachusetts taxable income.
Important Notes
This exemption applies to military retirement pay and qualifying survivorship benefits. Other retirement income, such as private pensions, annuities, and certain non-military retirement plans, may still be taxable by Massachusetts unless another exemption applies.
If you receive both military retirement income and other pension income, review each source separately to determine which amounts qualify for the Massachusetts exemption.