Military Pay Subtraction

You may claim this subtraction if any of the following apply:

• You serve in the U.S. or U.N. armed forces and receive federally taxable active-duty military pay under U.S. Code, title 10.
• You are employed for the full-time administration of the Minnesota Department of Military Affairs under Minnesota Statute 190.08, subdivision 3. If you are not paid under M.S. 190.08, subdivision 3, you do not qualify for this subtraction.
• You serve in the Minnesota National Guard or Reserves, and you receive federally taxable active-duty pay for services or compensation for training and meetings under U.S. Code, titles 10 and 32. Examples include:
  • Active Duty Operational Support (ADOS)
  • Natural disaster emergency response, missing persons searches, and airport security duty
  • Called to state active service (by executive order or similar measure) in aid of state civil authority or in case of actual or threatened public disaster, war, riot, tumult, breach of the peace, or resistance of process
  • Re-enlistment bonuses
  • National Guard and Reserves duties, annual training, and drill weekends, including training and meetings inside or outside of Minnesota
  • Compensation for serving while assigned to Active Guard Reserves (AGR) under U.S. Code, title 32

Complete Schedule M1M, Income Additions and Subtractions. Include Schedule M1M when filing your Minnesota income tax return.

You are only eligible for the income tax subtraction if you are called to active duty in the armed services under U.S. Code, title 10, when the president issues an executive order in time of war or emergency. At that time, you are declared a part of the military and may subtract your pay received for this period only.

If you are not a Minnesota resident, you may claim the subtraction under the Soldiers and Sailors Act, even though resident officers may not. 

You may qualify for this subtraction if both of these are true:

• You are a member of the National Guard
• You received paid compensation for service or duty under U.S. Code, title 32 (1983), and travel to or from that service or duty.

Note: If your regular/civilian pay portion does not fall under title 32, it would not qualify for the subtraction.

You remain a resident of that state unless you take steps to change your legal residence (domicile) to Minnesota. For details, go to 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 taxable to Minnesota and exceeding the state minimum filing requirement.

For more information, go to Military Personnel – How Minnesota Taxes Your Income.