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Military Pension Subtraction
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You may be able to subtract certain military retirement pay (including pensions) from your Minnesota taxable income and alternative minimum taxable income.
Claim this subtraction by completing Schedule M1M, Income Additions and Subtractions.
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You may qualify if your retirement pay is taxable on your federal return and was for any of these:
- Service in the active component of the military (U.S. Code Title 10, sections 1401 to 1414)
- Retirement pay for service in the reserve component (U.S. Code Title 10, section 12733)
- A divorcee who receives a portion of their former spouse’s military pension through their divorce settlement is eligible to subtract that income to the extent it is included in FAGI.
- Survivor benefit plan payments, including payments to a former spouse as part of a court order (U.S. Code Title 10, sections 1447 to 1455)
You may not claim this subtraction if you claim the Credit for Past Military Service.
Note: Pensions received exclusively from service as a dual-status technician do not qualify for this subtraction.
It depends on your income and military retirement pay.
| If you qualify for this subtraction, and | Then |
|---|
| Your federal adjusted gross income is $37,500 or more (review federal Form 1040, line 1) | The subtraction will provide a greater benefit. |
| Your federal taxable income is less than your qualifying military pension or retirement pay (review Form M1, line D) | Generally, the subtraction will provide an equal or greater benefit. |
| You received $14,018 or more in qualifying military pension or retirement pay. | Generally, the subtraction will provide an equal or greater benefit. |
You are eligible for the military pension subtraction only if you have received computed retirement pay under provision Chapter 71 (section 1401-1414) of Title 10.
See "Who Qualifies" for other retirement pay that may qualify.
If your military pension is combined with your other federal or civilian pensions, you’ll need to find the percentage of your pension directly related to your qualifying past military service to determine your subtraction.
To find this percentage, contact the U.S. Office of Personnel Management (OPM), Retirement Services, for a retirement benefit booklet. The booklet provides the years and months of military service along with the total years and months of creditable service.
U.S. Office of Personnel Management – Retirement Services
Phone: 1-888-767-6738
Email: retire@opm.gov
