Military Retirement Income Partial Deduction
Partial deduction of military retirement pay from Idaho state income tax (age- and disability-based limits; not a full exemption).
At a glance
- Benefit type
- Tax Benefits — Idaho
- Who it's for
- Veterans, Survivors
- VA rating needed
- No rating requirement
- Estimated value
- Partial deduction (capped; 5.3% flat rate)
- Where it applies
- Idaho
- Last verified
- May 12, 2026
What is Military Retirement Income Partial Deduction?
Military Retirement Income Partial Deduction is a Idaho tax benefits benefit for veterans, survivors. Partial deduction of military retirement pay from Idaho state income tax (age- and disability-based limits; not a full exemption). The listed value is Partial deduction (capped; 5.3% flat rate).
Who qualifies
- Available to any veteran
- Idaho residency
Who is eligible
Eligibility
Military retirees who meet Idaho's age or disability threshold. Military pensions qualify if (any one): classified as disabled, OR age 62+, OR under 62 employed during the year with sufficient income requiring a federal return. (Note: standard age 65+/62+disabled rule applies to other federal/Idaho pensions, not military.) Must claim the deduction on Idaho Form 39R.
What Military Retirement Income Partial Deduction covers
Covers
A partial deduction (not a full exemption) from Idaho state income tax. The annual deduction is capped at statutory amounts that are adjusted each year by the Idaho State Tax Commission; any amounts above the cap are offset by Social Security and similar retirement income. Survivor Benefit Plan (SBP) payments are treated the same way.
Tax rate
Idaho's flat income tax rate is 5.3% (HB 40, March 2025, retroactive to 2025 tax year and continuing for 2026), so each $1,000 of allowed deduction saves roughly $53/year.
How to apply for Military Retirement Income Partial Deduction
How to apply
Claimed on Idaho state income tax return using Form 39R.
Verified information & sources
Last verified: May 12, 2026
Official source: tax.idaho.gov
Compiled and fact-checked against the official source linked above. Benefit rules and dollar amounts change over time — always confirm current details at the official source before applying. A county Veterans Service Officer (VSO) is a free, accredited advocate who can review your eligibility and help you file at no cost.
Frequently asked questions about Military Retirement Income Partial Deduction
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