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State Benefit·Pennsylvania·🏛️Tax Benefits

Military Retirement Pay Tax Exemption

Military retirement pay is completely exempt from Pennsylvania state income tax, including SBP and RCSBP annuities.

Verified May 12, 2026againstpa.gov

At a glance

Benefit type
Tax Benefits — Pennsylvania
Who it's for
Veterans
VA rating needed
No rating requirement
Estimated value
3.07% savings on retirement pay
Where it applies
Pennsylvania
Last verified
May 12, 2026

What is Military Retirement Pay Tax Exemption?

Military Retirement Pay Tax Exemption is a Pennsylvania tax benefits benefit for veterans. Military retirement pay is completely exempt from Pennsylvania state income tax, including SBP and RCSBP annuities. The listed value is 3.07% savings on retirement pay.

Who qualifies

Veterans
  • Available to any veteran
  • Pennsylvania residency

How to apply

Apply through the official Pennsylvania agency.

Open application

Who is eligible

Eligibility

Any military retiree receiving retired pay. No disability rating or wartime service required. PA resident filing PA taxes.

What Military Retirement Pay Tax Exemption covers

Covers

Military retirement pay, SBP, and RCSBP annuities. PA flat income tax rate is 3.07%.

Important to know

TSP distributions are still subject to state taxes.

Verified information & sources

Last verified: May 12, 2026

Official source: pa.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.

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Frequently asked questions about Military Retirement Pay Tax Exemption

Who qualifies for Military Retirement Pay Tax Exemption?▾
Military Retirement Pay Tax Exemption is for Veterans; available to any veteran; pennsylvania residency. See the eligibility details on this page and confirm with the official source before applying.
How much is Military Retirement Pay Tax Exemption worth?▾
The listed value is 3.07% savings on retirement pay. Amounts can change — confirm the current figure at the official source linked on this page.
How do I apply for Military Retirement Pay Tax Exemption?▾
Apply through the official source linked on this page. A county Veterans Service Officer (VSO) can review your eligibility and help you file at no cost.
Where can I verify Military Retirement Pay Tax Exemption?▾
Benefit rules and dollar amounts change, so always confirm current details at the official source linked on this page. A free, accredited county or state Veterans Service Officer (VSO) can also verify your eligibility and help you apply.

Other Pennsylvania Tax Benefits

Disabled Veterans Real Estate Tax Exemption

Full exemption from all real property taxes on primary residence for 100% P&T disabled veterans.

$3,000-$6,000+/year

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