For tax years prior to 2024, Montana requires military retirement income to be included in taxable income.
"When you retire from the U.S. armed forces, you lose coverage by the Federal Service Members Civil Relief Act. Treat your income, including your military pension, like other income for tax purposes."
Note: Starting in tax year 2024, working military retirees may be eligible to exempt a portion of their military retirement income from Montana tax. The Working Military Retirement Exemption eligibility is directly affected by the taxpayer's Montana residency status and is only available to be claimed for up to 5 years pending further legislative extensions. Learn more about the details of this new legislation here.
Additional Information:
Montana.gov: Working Military Retirement Exemption
Montana.gov: Montana Income Tax information for military personnel and spouses
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