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Maine military pay tax

Maine exempts military pay only in certain cases, mainly when you are stationed outside the state.

Active-duty payExempt if stationed outside the state
Military retired payRetired pay exempt
E-5 basic pay a year$49,320
BAH and BASNever taxed

Active-duty and reserve pay

Active-duty pay earned by residents outside Maine is not taxed.

An E-5 with over 6 years of service earns $49,320 a year in basic pay. If those conditions are met, Maine does not tax it. If not, the full $49,320 counts as Maine income. Housing and food allowances are never taxed by any state.

Military retired pay

Military retired pay is exempt.

Your state of legal residence decides

Military pay is taxed by your state of legal residence, usually the state you lived in when you joined or one you later adopted by changing your records, not by the state where you are stationed. This comes from the Servicemembers Civil Relief Act. Spouses can choose to use the member's state of legal residence for their own income too.

See your total pay with state tax

Questions

Does Maine tax military pay?

Maine exempts military pay only in certain cases, mainly when you are stationed outside the state. Active-duty pay earned by residents outside Maine is not taxed.

Does Maine tax military retirement pay?

Military retired pay is exempt.

Is BAH taxed in Maine?

No. BAH and BAS are not taxable income for federal or state tax in any state.

Which state taxes me if I am stationed in Maine?

Under the Servicemembers Civil Relief Act, your military pay is taxed only by your state of legal residence, not the state where you are stationed. If Maine is not your legal residence, Maine does not tax your military pay.

Sources: Air Force benefits office state tax summary, tax year 2025 and Maine tax authority. State rules change often, so confirm with the state before you file.