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.