When deciding on a retirement home, career members of the military often take into account the way a particular state taxes retired military pensions. Oklahoma offers a state tax break for retired members of the United States Armed Forces receiving disability pay, which is untaxed. Regular retired military payments receive an exclusion from state tax.
Retired Military Pay
After serving the country, retired military members receive excellent pension benefits. Technically referred to as "reduced compensation for reduced services," military pensions and benefits begin on the day of retirement, no matter the age of the beneficiary. For someone serving 20 years in the military with enlistment at age 17, the retirement pension could start at the age of 37. The retirement benefit includes an annual cost-of-living increase.
Military Retirement Tax
As of the time of publication, an Oklahoma resident receiving a retired military pension may exclude the greater amount of up to 75 percent of benefits or $10,000. The amount excluded cannot exceed that included as the person's federal adjusted gross income. For consideration, the retirement benefits must be from service in a component of the U.S. military. When filing state taxes, refer to the Oklahoma resident's packet 511, Schedule 511-A, or the non-resident or part-year resident packet 511NR, Schedule 511NR-B.
Along with the large exclusion for taxable retirement pay for retired military personnel in Oklahoma, Social Security benefits are not taxed. This may be an important consideration if the retired military member and the spouse also receives Social Security benefits. While retired military personnel do not receive Social Security benefits per se, those taking on civilian jobs after retirement may receive these benefits.
Oklahoma provides seven veterans centers for those serving during wartime, including nursing and domiciliary care. The Oklahoma War Veterans Commission also provides financial assistance to veterans, spouses, surviving spouses and children experiencing emergencies due to job loss or loss of income due to accident, illness or loss of a home due to a natural disaster. The OWVC also provides counseling for filing claims for state benefits or the U.S. Department of Veterans Affairs, in various localities throughout the state.
A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including Sapling, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.