Military Retirement

Effective for taxable years beginning on or after January 1, 2022, a taxpayer may deduct the amount received during the taxable year from the United States government for the following payments:

• Retirement pay for service in the uniformed services of the United States to a retired member that meets either of the following:
  • Served at least 20 years in the uniformed services.
  • Medically retired under 10 U.S.C. Chapter 61. This deduction does not apply to severance pay received by a member due to separation under 10 U.S.C. Chapter 61.
• Payments of a Plan defined in 10 U.S.C. § 1447 to a beneficiary of a retired member eligible to deduct retirement pay under G.S. 153.5(b)(5a)a.

The deduction is only allowed to the extent the payments are included in the taxpayer's adjusted gross income.  

Note: Amounts deducted under G.S. 153.5(b)(5a) may not also be deducted under G.S. 153.5(b)(5).

For additional information, see the Personal Taxes Bulletins.