Revenue reminds military service members about valuable tax benefits during National Military Appreciation Month

ST. PAUL, Minn. - In 1999, Congress designated the month of May as National Military Appreciation Month. During this month of appreciation, the Minnesota Department of Revenue reminds military service members and their families about Minnesota’s valuable military-related tax benefits that may be available to them.

“Minnesota provides many valuable tax benefits for our military service members and their families,” said Revenue Commissioner Robert Doty. “Whether these benefits result in a reduction in taxable income a service member claims or lead to a larger tax refund, we want to ensure that our military service members have the resources and information they need to be able to claim all the tax benefits our state offers.”

The department offers a Military Service Members webpage to learn that lists military tax benefits and information on claiming them. Minnesota’s military tax benefits include:

• Military Pension Subtraction. Taxpayers may subtract military retirement pay (including pensions) from their Minnesota taxable income.
• Credit for Military Service in a Combat Zone. Taxpayers may qualify for this credit if they served in a combat zone or qualified hazardous duty area on or after January 1, 2018.
• Credit for Past Military Service. Veterans of the U.S. military, including the National Guard and Reserves, may qualify for a tax credit up to $750 for past service.
• Active-Duty Military Pay Subtraction. Taxpayers may be able to subtract federally taxable active-duty military pay from their Minnesota taxable income.
• Filing Extensions. Taxpayers may qualify for an extension if they are serving in the U.S. military and cannot file or pay their Minnesota income tax by the due date.
• Market Value Exclusion on Homesteads of Disabled Veterans. Honorably discharged veterans may qualify for a property tax exclusion on their homestead if they have a service-connected disability rating of 70% or higher.

Additionally, beginning for tax year 2021, veteran’s disability compensation is no longer included in the household income calculation when filing for a property tax refund.

A full list of benefits available to military service members can be found by searching Keyword Military. See the department’s military tax tips video and sign up for email alerts to receive up-to-date military tax information.

Information on the federal tax benefits for military service members can be found on the IRS’ website.

If you have questions, email individual.incometax@state.mn.us, or call 651-296-3781 or 1-800-652-9094 (toll-free).    

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