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 and 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 Special Work (ADSW) or Active Duty Operational Support (ADOS)
  • Natural disaster emergency response, missing persons searches, and airport security duty
  • 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 may qualify for this subtraction if both of the following are true:

• You are a member of the Minnesota National Guard
• You received paid compensation for one of the following:
  • Service or duty under U.S. Code, title 32 (1983), and travel to or from that service or duty
  • State active service as defined in Minnesota Statute 190.05, subdivision 5a(1)
  • Services performed under Minnesota Statute 190.08, subdivision 3
  • Services performed under the Active Guard Reserve (AGR) Program

Note: If your regular/civilian pay portion does not fall under one of the received compensations above, 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 more information, 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 taxable to Minnesota and exceeding the state minimum filing requirement.

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