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Pennsylvania military pay tax

Pennsylvania 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

Military pay of residents stationed outside Pennsylvania is exempt. Residents stationed in the state are taxed on it.

An E-5 with over 6 years of service earns $49,320 a year in basic pay. If those conditions are met, Pennsylvania does not tax it. If not, the full $49,320 counts as Pennsylvania 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 Pennsylvania tax military pay?

Pennsylvania exempts military pay only in certain cases, mainly when you are stationed outside the state. Military pay of residents stationed outside Pennsylvania is exempt. Residents stationed in the state are taxed on it.

Does Pennsylvania tax military retirement pay?

Military retired pay is exempt.

Is BAH taxed in Pennsylvania?

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 Pennsylvania?

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 Pennsylvania is not your legal residence, Pennsylvania does not tax your military pay.

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