If you or the spouse of a military retiree receives military retirement income, you will be able to subtract up to $5,000 of your military retirement income from your federal adjusted gross income before determining your Maryland tax. Beginning with tax year 2015, if you you are age 65 or older, you will be able to subtract up to $10,000 of the military retirement income.
The retirement income must have been received as a result of any of the following military service:
- Induction into the U.S. armed forces for training and service under the Selective Training and Service Act of 1940 or a subsequent Act of similar nature.
- Membership in a reserve component of the U.S. armed forces.
- Membership in an active component of the U.S. armed forces.
- Membership in the Maryland National Guard.
The benefit also applies to persons separated from active duty employment with the commissioned corps of the Public Health Service, the National Oceanic and Atmospheric Administration, or the Coast and Geodetic Survey.
To claim the benefit, complete Form 502 and follow the instructions included in the resident tax booklet for line 13. Be sure to indicate code letter u on line 13.
If you are a retired military member 65 years of age or older, you may also qualify for Maryland's pension exclusion.