Questions & Answers

What is the Military Retirement Pay Exclusion?

Starting with the 2019 tax year, a North Dakota deduction is available to individuals who receive retirement pay benefits as a retired member of the U.S. Armed Forces or its reserve components, the Army National Guard, or the Air National Guard. "U.S. Armed Forces" means the Army, Navy, Air Force, Marine Corps, and Coast Guard. The deduction is also allowed to a surviving spouse of a deceased retired service member. Retirement pay benefits received for federal civil service employment as a military technician (dual status) are not eligible for the deduction.

Retired service members (or their surviving spouses) are still subject to the North Dakota filing requirements even if military retirement pay benefits are their only income for the year.

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