Military pay and New York state tax
What this state's own tax authority says about military pay, retirement pay, combat pay, Guard and Reserve duty, and military spouses. General information, not advice about your return.
Primary-source review complete. We have read this state's own tax authority on every point we cover, and each point below either has an answer or expressly does not apply. This describes how complete our reading is. It says nothing about whether the state's rules are good or bad for you.
Tax year 2025. Rules read as effective from 2025-01-01.
Sources last read 2026-08-15.
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What the state says
Does the state tax personal income?
New York State imposes a personal income tax administered by the Department of Taxation and Finance, which publishes dedicated guidance for military personnel and veterans.
Active duty pay
New York states that a resident's military pay is subject to New York State income tax to the same extent it is subject to federal income tax, with stated exceptions for combat zone pay and for compensation or bonuses for active service while a prisoner of war or missing in action during the Vietnam conflict.
Stationed outside the state
New York states that the taxability of military pay is determined by residency, that residency turns on domicile and on maintaining a permanent place of abode, and that the general rules may not apply where the service member or spouse elects a different resident status under the Servicemembers Civil Relief Act.
Combat pay
New York states that combat zone pay is not subject to New York State income tax.
Military retirement pay
New York states that military pension payments received by retired military personnel or by their beneficiary are totally exempt from New York State, New York City and Yonkers income taxes.
Survivor benefits
New York states that the military pension exemption reaches payments received by a beneficiary of retired military personnel, and that benefits paid to or on account of a veteran or beneficiary under the laws relating to veterans are treated the same for New York State purposes as for federal purposes.
Guard and Reserve
New York describes a subtraction modification for service in the New York State organized militia and states that pay for the annual two-week training program does not qualify for that subtraction, pointing to the numbered modification in the instructions for its modifications form.
Military spouses
New York publishes lettered election codes for military filers, including a code for a civilian spouse of a service member electing to use the state where the service member's permanent duty station is located for state income tax purposes.
Filing
New York states that resident status for income tax purposes depends on domicile and on whether a permanent place of abode was maintained during the tax year, and that resident status determines the applicable filing rules.
Withholding
New York states that a resident's income is subject to withholding of New York State income tax and, where applicable, New York City or Yonkers income taxes, and that a resident whose withholding exceeds the tax owed files the resident income tax return to claim a refund. For a nonresident service member, New York states that military pay is not subject to withholding of New York State income tax and that the exemption is claimed by filing Form IT-2104-MS or Department of Defense Form 2058-1 with the military finance officer, that a nonresident military spouse's income earned in New York State is not subject to New York withholding and that the exemption is claimed on Form IT-2104-E filed with the employer, and that tax already withheld is recovered by filing the nonresident and part-year resident return.
Local taxes
Local taxes may matter here
New York State names New York City and Yonkers income taxes alongside the state tax: it states that military pension payments are totally exempt from New York State, New York City and Yonkers income taxes, and that a resident's income is subject to withholding of New York State and, where applicable, New York City or Yonkers income taxes.
This covers local income tax only, and only as far as the source we cite goes. We do not look up individual cities, counties or school districts.
Primary sources
Every statement above is a restatement of one of these government sources. Each link opens the source itself.
- Information for military personnel and veterans New York State Department of Taxation and Finance — Re-retrieved 2026-08-15; page carries no tax-year label
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General education, built from primary government sources. Rules change, and your own facts matter. This is not individualized tax or legal advice.
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