Active Duty Military Pay
Members of the military who are Minnesota residents may subtract federally taxable active-duty military pay when determining their Minnesota tax.
This subtraction may be claimed by:
- Members serving in the U.S. or U.N. armed forces who receive federally taxable active-duty military pay under U.S. Code,
- Members of the Minnesota National Guard and Reserves, who receive federally taxable active-duty pay for services or compensation for training and meetings under U.S. Code, Title 10 and Title 32. Examples include:
- Active Duty Special Work (ADSW) or Active Duty Operational Support (ADOS)
- Natural disaster emergency response and missing persons searches
- Re-enlistment bonuses
- Personnel employed for the full time administration of the Minnesota Department of Military Affairs under M.S. 190.08, subd 3.
- If you are employed by the Minnesota Department of Military Affairs but are not paid under M.S. 190.08, subd 3., you do not qualify for this subtraction.
The subtraction is also not allowed for compensation received for employment by the United States Public Health Service unless received for service after being called to Active Duty under Title 10.
Minnesota National Guard Pay
Minnesota National Guard members may subtract federally taxable pay for the following types of service:
- State or federal active service for natural disaster emergency response, missing person searches, and airport security duty.
- National Guard and Reserves duties, annual training and drill weekends. (For National Guard members, this includes training and meetings, whether inside or outside of Minnesota.)
Beginning in 2014, the subtraction is allowed for compensation received for service by a Minnesota resident serving in the National Guard while assigned to Active Guard Reserves (AGR) under Title 32.
What if I am not a resident of Minnesota?
If you were a resident of another state when you enlisted, you remain a resident of that state unless you take steps to change your legal residence (or “domicile”) to Minnesota. For details, see Residency of Active-Duty Military Personnel.
If you are not a Minnesota resident, Minnesota will not tax your military pay or your spouse’s wages (in most cases). You are not required to file a Minnesota return unless you have other income that is taxable to Minnesota and exceeds the state minimum filing requirement.
United States Public Health Officers
The United States Public Health Service is a division of the US Department of Health and Human Services. They oversee the U.S. Public Health Service Commissioner Corps, under Title 42. The officers of the Corps wear uniforms and have ranks similar to the U.S. Navy and Coast Guard, but they are not members of the armed forces as defined by Title 10. They are not eligible for the income tax subtraction, unless they are called to active duty, in the armed services, under Title 10 when the President issues an executive order, in time of war, or emergency. At that time, they are declared a part of the military and become eligible for the subtraction of pay received for this period only.
Nonresident United States Public Health Service officers may claim the subtraction under the Soldiers and Sailors Act even though resident officers may not.