Military Retirement Pay State Income Tax Exemption
100% of military retirement pay is exempt from Oklahoma state income tax.
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Apply directly through the official Oklahoma agency.
About this benefit
Eligibility
Any military retiree receiving retirement pay. Oklahoma resident. No disability rating required. Effective for tax year 2022 onward.
Estimated savings
Oklahoma's top marginal rate is 4.5% for tax year 2026 (down from 4.75% in 2025), so a retiree receiving $30,000/year saves approximately $1,350/year.
How to apply
Claimed on your Oklahoma state income tax return.
Verified against official source
Last checked 2026-05-05 against oklahoma.gov. Always confirm current rates and rules with the Oklahoma state agency before applying.
Other Oklahoma Tax Benefits
Active Duty Military Pay State Income Tax Exemption
100% of active duty military compensation is deductible from Oklahoma taxable income.
Full exclusion of military pay from state income tax
Military Survivor Annuity State Tax Exemption
Survivor annuities from U.S. Armed Forces are exempt from Oklahoma state income tax.
100% Disabled Veteran Property Tax Exemption
Full exemption from property taxes on the homestead for 100% permanently disabled veterans.
Full property tax exemption ($1,500-$2,500+/yr)
100% Disabled Veteran Sales Tax Exemption
Exemption from Oklahoma state sales tax on up to $25,000 in purchases per year for 100% disabled veterans.
Up to $1,125/yr in sales tax savings
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