HB 3306
Exempts from state income tax up to $17,500 in retirement pay or pension received for service in the Armed Forces of the United States for a taxpayer who is receiving retirement pay or pension for service in the Armed Forces of the United States and who has not attained 63 years of age before the close of the taxable year for which a return is filed.
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Sign in to take action- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill provides a state income tax exemption for military retirees and veterans who have not reached age 63. It allows taxpayers to exclude up to $17,500 in retirement pay or pension income received for service in the Armed Forces of the United States from their state income tax. The exemption applies to tax years beginning on or after January 1, 2025.
Key provisions
- Exempts up to $17,500 in military retirement pay or pension from state income tax.
- Applies to taxpayers who have not reached age 63 before the end of the tax year.
- The exemption applies to retirement pay or pension received for service in the Armed Forces of the United States.
- The Department of Revenue will adjust the maximum dollar amount annually based on the Consumer Price Index.
- The Department of Revenue may adopt rules to implement the exemption.
- The exemption begins to apply to tax years starting January 1, 2025.
Who is affected
- Veterans
- Military personnel
- Taxpayers receiving military retirement pay or pension
Notable changes
- Establishes a specific dollar amount ($17,500) for the income exemption.
- Sets an age limit (under 63) for eligibility.
- Includes an annual adjustment for cost of living increases.
Fiscal impact
The bill may result in a decrease in state tax revenue due to the exemption of military retirement income.
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