1. Is service pay totally or partially tax-exempt?
2. What are your taxation policies regarding exit bonuses
   and separation pay?
3. What are your taxation policies regarding retired pay 
   and survivor benefits?
4. Can taxpayers file forms generated by a computer, for 
   file electronically using a computer?
5. Is military pay factored into taxation of state income 
   other than service pay earned by military nonresidents?
6. Can separate state tax returns be filed even if a joint 
   federal return is filed?
7. What is your state's maximum tax rate?

Click on the links below to look up your state:

ALABAMA  ALASKA  ARIZONA  ARKANSAS 
CALIFORNIA  COLORADO  CONNECTICUT  
DELAWARE  D.C.  FLORIDA  GEORGIA  HAWAII  
IDAHO  ILLINOIS  INDIANA  IOWA 
KANSAS  KENTUCKY  LOUISIANA 
MAINE  MARYLAND  MASSACHUSETTS  MICHIGAN  
MINNESOTA  MISSISSIPPI  MISSOURI  MONTANA
NEBRASKA  NEVADA  NEW JERSEY  NEW MEXICO  
NEW YORK  NORTH CAROLINA  NORTH DAKOTA 
OHIO  OKLAHOMA  OREGON  PENNSYLVANIA 
RHODE ISLAND  SOUTH CAROLINA  SOUTH DAKOTA  
TENNESSEE  TEXAS  UTAH  VERMONT  VIRGINIA  
WASHINGTON  WEST VIRGINIA  WISCONSIN  WYOMING

---

ALABAMA

     Ala. Dept. of Revenue
     Income Tax Division
     Individual Audit Section
     P.O. Box 327410
     Montgomery, AL 36132
     (334) 242-1000
     Web site: http://www.ador.state.al.us

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Alabama state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: First $25,000 of severance pay (including unemployment compensation, termination pay, or income from a supplemental income plan) is exempt.
Retired pay/survivor benefits: Not taxed.
Accepts computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from an Alabama source, he must file Alabama Form 40-NR; military income is not included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 5 percent

ALASKA

     Web site: http://www.revenue.state.ak.us

No state income tax
Legal residents may be eligible for Permanent Fund Dividend. Check web site for more information: www.revenue.state.ak.us/pfd

ARIZONA

     Ariz. Dept. of Revenue
     Taxpayer Assistance
     1600 W. Monroe 
     Phoenix, AZ 85007
     (602) 255-3381
     Forms: (602) 542-4260; by fax (602) 542-3756
     Web site: http://www.revenue.state.az.us

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Arizona state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Both taxable. However, up to $2,500 of military retirement pay and/or survivor benefits is excluded.
Accepts computer forms? Yes.
Allows elecontronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from an Arizona source, he must file Arizona Form 140NR; military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 5.17 percent

ARKANSAS

     Ark. Finance and Administration
     Taxpayers' Assistance Office
     P. O. Box 1272 
     Room 216
     Little Rock, AR 72203
     (501) 682-7751
     Forms: (501) 682-2217
     Web site: http://www.ark.org/dfa/

Military income: Legal residents can exclude up to $6,000 of military pay or allowance. Benefits derived under the GI Bill also are excluded. Combat pay is taxable.
Exit bonuses/separation pays: Up to $6,000 of exit or separation pay is excluded.
Retired pay/survivor benefits: Up to $6,000 of federal retirement pay and/or survivor benefits is excluded.
Accepts computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from an Arkansas source, he must file Arkansas Form AR1000NR; military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 7 percent

CALIFORNIA

     Calif. Franchise Tax Board
     P.O. Box 942840
     Sacramento, CA 94240-0040
     (800) 338-0505 (automated)
     800-852-5711
     Web site: http://www.ftb.ca.gov 

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from California state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Taxable.
Accepts computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from California source, he may be required to file California Schedule CA (540 NR); military income is included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes, under certain conditions. Order Calfornia tax publication 1032 "Military Guidelines" for details.
Maximum tax rate: 9.3 percent

COLORADO

     Colo. Dept. of Revenu
     1375 Sherman St.
     Denver, CO 80261
     Assistance: (303) 232-2446
     Forms: (303) 232-2414
     Web site: http://www.state.co.revenue

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Colorado state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Up to $20,000 of retired pay is exempt if recipient is age 55 or older. Up to $20,000 is exempt regardless of age of widowed spouse and/or orphan if they are receiving the pension as the result of the death of the individual who earned it. However, that individual must have been age 55 or older when he died.
Accepts computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Colorado source, he may be required to file Colorado Form 104PN; military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? No.
Maximum tax rate: 5 percent; Colorado has a flat tax rate.

CONNECTICUT

     Taxpayer Services Division
     Dept. of Revenue Services
     25 Sigourney St.
     Hartford, CT 06106
     In state: (800) 382-9463
     Hartford area and out of state: (860) 297-5962

     Web site: http://www.state.ct.us/drs/

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Connecticut state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Taxable.
Accept computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Connecticut source, he may be required to file Connecticut Form CT-1040NR/PY; military income is included in figuring tax rate on nonmilitary income. Consult IP 92(2.4) "Connecticult income tax information for military personnel and veterans" for details.
Permits separate returns even if a joint federal return is filed? Yes, under certain conditions.
Maximum tax rate: 4.5 percent.

DELAWARE

     Del. Division of Revenue
     820 French St.
     Wilmington, DE 19801
     (302) 577-8200
     Fax: (302) 577-8202
     Fax for form requests: (302) 5778201
     Electronic filing: (302) 577-8461
     Web site: http://www.state.de.us/revenue/

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Delaware state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Up to $2,000 of military retirement excluded for individuals under age 60; $3,000 if 60 or older. Survivor benefits are taxable.
Accept computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Delaware source, he may be required to file Delaware Schedule 200-02NR. Military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 6.4 percent

DISTRICT OF COLUMBIA

     D.C. Government
     Office of Tax and Revenue
     441 4th St., N.W., Suite 550
     Washington, DC 20001
     (202) 727-4829
     Forms: (202) 727-6170
     Web site: http://www.dccfo.com

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from District tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Up to $3,000 of military pay excluded for individuals 62 or older. Survivor benefits are taxable.
Accepts computer forms? Yes.
Allows electronic filing? No. District is conducting test pilot program in 1999.
Nonresident filings: District does not tax nonresidents.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 9.5 percent

FLORIDA

     Florida Dept. of Revenue
     Tax Information Services
     5050 W. Tennessee St.,
     Bonham Bldg.
     Tallahassee, FL 32399-0100
     General Tax Information: 850-922-4827
     Taxpayers Services: 850-488-6800
     Web site: http://www.state.fl.us/dor/

No state income tax (However, legal residents are subject to a tax on intangable assets such stocks, bonds, or mutual funds and must file Florida tax form DR601 if they owe more than $60. The tax is levied on the value of the assets as of Jan. 1. of each tax year; the tax rate is $1 per $1,000 up $100,000 and $2 per $1,000 above that for singles with the first $20,000 exempt; and $1 per $1,000 up to $2000,000 and $2 per $1,000 above that for couples with first $40,000 exempt.)

GEORGIA

     Ga. Taxpayer Assistance
     200 Piedmont Ave.
     322 West Tower
     Atlanta, GA 30334
     (404) 656-4188
     (404) 656-4071
     Forms: (404) 656-4293
     Web site: http://www2.state.ga.us/Departments/DOR/

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Georgia state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Up to $12,000 of military retirement income excluded for individuals age 62 or older or who are permanently and totally disabled.
Accepts computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filings: If the military nonresident has nonmilitary income from Georgia source, he may be required to file a nonresident income form. Military income is not included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed: No, unless one spouse is a Georgia resident and the other is not.
Maximum tax rate: 6 percent.

HAWAII

     Hawaii Dept. of Taxation
     P.O. Box 3559
     Honolulu, HI 96811
     (800) 222-3229
     Forms: (800) 222-7572
     Web site: http://www.state.hi.us/tax/tax.html

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Hawaii state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Not taxed.
Accepts computer forms? Yes.
Allows electronic filing? No.
Nonresident filing: If the military nonresident has nonmilitary income from Hawaii source, he may be required to file Hawaii tax form N-15. Military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 10 percent.

IDAHO

     Taxpayer Services
     Idaho State Tax Commission
     P.O. Box 36
     Boise, ID 83722
     (208) 334-7660
     (800) 972-7660
     Web site: http://www.2.state.id.us/tax/

Military income: If active duty member is living outside the state for more than 120 consecutive days, his military pay is not subject to tax. Otherwise, military pay is taxed in general according to federal guidelines.
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Both taxable. However, an individual who is disabled and 62 or older, or is 65 or older may be eligible for tax deduction.
Accepts computer forms? Yes.
Allows electronic filing: Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Idaho source, he may be required to file Idaho Form 43. Military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? No.
Maximum tax rate: 8.2 percent

ILLINOIS

     Illinois Dept. of Revenue
     Taxpayer Correspondence
     P. O. Box 19044 
     Springfield, Illinois 62794-9044
     (800) 732-8866
     Forms: (800) 356-6302
     Web site: http://www.revenue.state.il.us/

Military income: Does not tax military income. See Illinois tax publication 102 "Illinois filing requirements for military personnel" for details.
Exit bonuses/separation pays: Not taxed.
Retired pay/survivor benefits: Not taxed.
Accepts computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Illinois source, he may be required to file Illinois IL10-40 and Schedule NR. Military income is not included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 3 percent.

INDIANA

     Ind. Dept. of Revenue
     Taxpayer Services Div.
     Indiana Govt. Center
     North 100 N. Senate Ave., #105
     Indianapolis, IN 46204
     (317) 232-2240
     Forms by fax: 317/232-2329
     Forms by mail: (317) 486-5103
     Forms by e-mail: pfrequest@dor.state.in.us
     Web site: http://www.ai.org/dor/index.html

Military income: Up to $2,000 of military income is excluded. Order Indiana tax information bulletin No. 27, "Indiana Adjusted Gross Income Tax as Applicable to Military Personnel" for details.
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Service member or surviving spouse (if 60 on the last day of the tax year) is entitled to a deduction of up to $2,000 of military retirement or survivor's benefits. If you received both military pay and retirement pay or survivor's benefits in the same tax year, you can not exclude more than $2,000 in total.
Accepts computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Indiana source, he may be required to file Indiana IT-40PNR. Military income is not included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? No.
Maximum tax rate: 3.4 percent.

IOWA

     Iowa Department of Revenue and Finance
     Taxpayer Services
     Hoover State Office Building
     Des Moines, IA 50319
     In state: (800) 367-3388
     Out of state: (515) 281-3114
     Web site: http://www.state.ia.us/tax/

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Iowa state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Up to $10,000 excluded for joint filers and up to $5,000 for all other filing statuses for those 55 and older, disabled or surviving spouse of qualifying person.
Accept computer forms? Yes.
Allows electronic filing: Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Iowa source, he may be required to file Iowa IA 126. Military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 8.98 percent.

KANSAS

     Kansas Department of Revenue Taxpayer Assistance Bureau 
     915 S.W. Harrison St.,
     Topeka, KS 66625-0001 
     (785) 296-0222
     Web site: http://www.ink.org/public/kdor/

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Kansas state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Not taxed.
Accept computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Kansas source, he may be required to file Kansas Schedule S, Part B. Military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? No.
Maximum tax rate: 6.45 percent.

KENTUCKY

     Kentucky Revenue Cabinet
     Taxpayer Assistance
     200 Fair Oaks Lane
     Frankfort, KY 40620
     (502) 564-4581
     Forms: (502) 564-3658
     Web site: http://www.state.ky.us/agency/revenue/revhome.htm

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Kentucky state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Not taxed.
Accept computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Kentucky source, he may be required to file Kentucky Form 740NP. Military income is not included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 6 percent; Kentucky has flat tax.

LOUISIANA

     La. Department of Revenue 
     P.O. Box 201
     Baton Rouge, LA 70821
     (504) 925-4611
     Forms: (504) 925-7532
     Web site: http://www.rev.state.la.us/

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Louisiana state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Not taxed.
Accepts computer forms? Yes.
Allows electronic filing: Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Louisiana source, he may be required to file Louisiana IT-540B. Military income is not included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? No.
Maximum tax rate: 6 percent.

MAINE

     Maine Revenue Services
     Income/Estate Tax Division
     Station #24
     Augusta, ME 04333-0024
     (207) 626-8475 (automated during off business hours)
     Forms: (207) 624-7894
     Refund information: (207) 626-8461
     Web site: http://janus.state.me.us/revenue/ 

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Maine state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Taxable.
Accepts computer forms? Yes.
Allows electronic filing? No.
Nonresident filing: If the military nonresident has nonmilitary income from Maine source, he may be required to file Maine 1040-ME. Military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed: Yes, under certain circumstances.
Maximum tax rate: 8.5 percent.

MARYLAND

     Md. Taxpayer Service
     110 Carroll St.
     Annapolis, MD 21411
     Central Maryland: (410) 260-7980
     Others: 800-MD-TAXES
     Web site: http://www.marylandtaxes.com

Military income: Up to $15,000 of military pay may be excluded if attributable to service outside the United States or its possessions; otherwise, legal residents are taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Maryland state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Up to $2,500 may be exempt if you are over 55 and were enlisted and meet limit on gross income; some military retirement pay also may be excluded for those who are 65 or older or totally disabled; survivor beenfits are taxable.
Accepts computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Maryland source, he may be required to file Maryland Form 505. Military income is not included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 4.875 percent. (However military members should be aware of Maryland's local or "piggyback" tax based on the county that they reside in which could make the maximum tax rate higher; nonresidents are not required to pay piggyback tax.)

MASSACHUSETTS

     Mass. Taxpayers Assistance
     100 Cambridge St.
     Boston, MA 02204
     Tax help: (617) 887-MDOR.
     Toll-free in Massachusetts, 800-392-6089.
     Web site: http://www.state.ma.us/dor

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Massachusetts state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Military retirement is not taxed; survivor benefits taxable.
Accepts computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Massachusetts source, he may be required to file Massachusetts Form1-NR/PY. Military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? Yes.
Maximum tax rate: 5.95 percent; however, dividends and certain other investment income subject to 12 percent tax.

MICHIGAN

     Mich. Dept. of Treasury
     Treasury Building
     Lansing, MI 48922
     (800) 487-7000
     Forms: (800) 367-6263
     E-mail: treasindtax@state.mi.us
     Web site: http://www.treas.state.mi.us 

Military income: Not taxed, but legal residents are required to file.
Exit bonuses/separation pays: Exempt if classified as military compensation.
Retired pay/survivor benefits: Retired pay is exempt. Survivor benefits are exempt if the amounts are exempt from federal income tax or are classified as military compensation or military retirement pay. Military retirement benefits that pass to the spouse of a deceased member of the military are exempt. Retirement benefits passing to other beneficiaries are taxed.
Accept computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Michigan source, he may be required to file Michigan Schedule NR. Military income is not included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? No.
Maximum tax rate: 4.4 percent; Michigan has flat tax.

MINNESOTA

     Minn. Dept. of Revenue
     Individual Income Tax Division
     Mail Station 5510
     St. Paul, MN 55146-5510
     (800) 652-9094
     Web site: http://www.taxes.state.mn.us

Military income: Legal residents taxed following federal tax rules. Generally, any benefit excluded from federal tax is excluded from Minnesota state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxable.
Retired pay/survivor benefits: Taxable.
Accept computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: If the military nonresident has nonmilitary income from Minnesota source, he may be required to file Minnesota Form M-1NR. Military income is included in figuring tax rate on nonmilitary income.
Permits separate returns even if a joint federal return is filed? No.
Maximum tax rate: 8.5 percent

MISSISSIPPI

     Mississippi Tax Commission
     P.O. Box 1033
     Jackson, MS 39215-3338
     (601) 923-7300
     Web site: http://www.mstc.state.ms.us

Military income: Legal residents taxed following federal tax rules. Any benefit excluded from federal tax is excluded from state tax. See "What you can exclude on your federal taxes."
Exit bonuses/separation pays: Taxable
Retired pay/survivor benefits: Retired pay is exempt after Jan. 1, 1994. The exemption also is available to the spouse or other beneficiary at the death of the primary retiree. Widows' pensions received from the VA are not taxable.
Accepts computer forms: Yes. Single taxpayers with no dependents or taxpayers filing joint or combined returns who meet certain qualifications may file their income tax returns by telephone.
Allows electronic filing? Yes.
Nonresident filing: Only for income other than service pay derived from Mississippi sources, file Form 80-205. Military income is not included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes, for residents only.
Maximum tax rate: 5 percent

MISSOURI

     Taxpayer Services
     Mo. Dept. of Revenue
     P.O. Box 3300
     Jefferson City, MO 65105
     (573) 751-7191
     Forms: (800) 877-6881
     Web site: http://www.dor.state.mo.us

Military income: Legal residents taxed following federal tax rules. Any benefit excluded from federal tax is excluded from state tax. See "What you can exclude on your federal taxes."
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Retired pay is taxed to the same extent as on the federal level, but for a single individual with a modified state adjusted gross income of less than $25,000 or a married couple with a combined income of $32,000, a government pension exemption of up to $6,000 is allowed. If a husband and wife each receives a government pension, each can qualify for an exemption of up to $6,000. SBP benefits are taxed to the same extent as on the federal level.
Accept computer forms? Yes, with the Missouri Department of Revenue's approval of the program.
Allows electronic filing? Yes. Missouri also will accept telefile returns from individuals receiving a telefile tax booklet. Obtain forms through your personal computer from the Department Bulletin Board, (573) 751-7846, or the web site.
Nonresident filing: Only for income other than service pay derived from Missouri sources. Military income is not included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: No.
Maximum tax rate: 6 percent

MONTANA

     Montana Dept. of Revenue
     Income and Miscellaneous
     Tax Division
     P.O. Box 5805
     Helena, MT 59604
     (406) 444-3674
     Web site: http://www.mt.gov/revenue/

Military income: Legal residents taxed following federal tax rules, including POW/MIA benefits. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes." If the military income is received under Title 10, it is fully exempt. The Guard-Reserve Pay received under this title is also exempt. Guard-Reserve pay received under Title 32 is fully taxable. A copy of the military orders must be attached to the return if the taxpayer is claiming exempt income.
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: All pensions are taxed. However, if federal adjusted gross income is less than $30,000, the first $3,600 of retirement benefits are fully excludable. Exclusion is phased out at $2 for every $1 earned for federal adjusted gross income between $30,000 and $31,800. If federal adjusted gross income exceeds $31,800 ($33,600 for married couple filing jointly), retirement benefits are fully taxable. SBP benefits are taxed to the same extent as on the federal level. If benefits are paid to survivor as pension and designated as such on Form 1099-R, benefits would qualify for retirement exclusion.
Accepts computer forms? Yes, but the forms must first be approved.
Allows electronic filing: Yes, for residents only who are not first-time filers.
Nonresident filing: Only for income other than service pay earned from Montana sources. Military income is not included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes.
Maximum tax rate: 11 percent, minus $1,940

NEBRASKA

     Neb. Dept. of Revenue
     P.O. Box 94818
     Lincoln, NE 68509-4818
     (800) 742-7474
     Forms: (800) 626-7899
     Web site: http://www.nol.org/home/NDR

Military income: Legal residents taxed following federal tax rules. Any benefit excluded from federal tax is excluded from state tax. See "What you can exclude on your federal taxes." Pay received for state service in Nebraska National Guard is taxable regardless of residence of the member.
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Taxed to the same extent as on the federal level.
Accepts computer forms: Yes, if the software has been approved by the department.
Allows electronic filing? Yes.
Nonresident filing: Only for income earned from Nebraska sources other than military pay. Military income is included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes, if service member is a nonresident and spouse is a state resident.
Maximum tax rate: 6.68

NEVADA

     Web site: http://www.state.nv.us/taxation

No state income tax

NEW HAMPSHIRE

     State of New Hampshire
     Dept. of Rev. Admin.
     P.O. Box 457
     Concord, NH 03302-0457
     (603) 271-2191
     Web site: http://www.state.nh.us/revenue/revenue.htm

No general income tax (5 percent tax on intangible income, such as interest and dividends, above $2,400).
Accepts computer forms? Yes.
Allows electronic filing? Yes.

NEW JERSEY

     New Jersey Division of Taxation
     Taxation Building
     PO Box 269
     Trenton, NJ 08646-0269
     (609) 588-2200
     Forms -- 
     In state: (800) 323-4400
     Out of state: (609) 588-2200
     Web site: http://www.state.nj.us/treasury/taxation

Military income: Legal residents taxed following federal tax rules. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes." New Jersey permits taxpayers who are domiciled in the state to be treated as a nonresident for tax purposes. The requirements are (a) no permanent home in New Jersey.; (b) spends no more than 30 days of tax year in state; and (c) has permanent home outside of New Jersey.
Exit bonuses/separation pays: Mustering-out payments are exempt.
Retired pay/survivor benefits: Under 1998 rule change, if you are 62 years of age or older or disabled under the Federal Social Security Act and are receiving a United States military pension or survivor's benefit from the Defense Finance and Accounting Service, the military pension or survivor's benefit is no longer taxable for New Jersey gross income tax purposes. Accept computer forms? Qualified individuals may file their resident income tax returns by touch-tone telephone.
Allows electronic filing? Yes.
Nonresident filing: Only for income earned from New Jersey sources other than military pay. Military income is included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes, if one spouse is a state resident and and the other is a full-year nonresident, or if both spouses are nonresidents and only one has income from New Jersey sources.
Maximum tax rate: 6.3 percent

NEW MEXICO

     State of New Mexico Taxation and Revenue Department
     P.O. Box 630
     Santa Fe, NM 87504-0630
     (505) 827-0700
     Forms: (505) 827-2206
     Web site: http://www.state.nm.us/tax/

Military income: Legal residents taxed following federal tax rules. Any benefit excluded from federal tax is excluded from state tax. See "What you can exclude on your federal taxes."
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Taxed to the same extent as on the federal level.
Accept computer forms/electronic filing: Forms generated by computer tax preparation software are accepted.
Allows electronic filing? Yes, through SecureTax, the only approved Web-filing service provider offering New Mexico federal/state electronic filing.
Nonresident filing: Only for income other than military pay earned from New Mexico sources. Military income is included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes, if service member is a nonresident and spouse is a state resident.
Maximum tax rate: 8.2 percent

NEW YORK

     N.Y. State Tax Dept.
     Taxpayer Assistance
     Bldg. 8; Harriman Campus
     Albany, NY 12227
     U.S. and Canada: (800) 225-5829
     Forms: U.S. and Canada: (800) 462-8100
     Web site: http://www.tax.state.ny.us 

Military income: Legal residents taxed following federal tax rules. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes." If a service member is domiciled in New York, but does not maintain a permanent home in the state during the tax year, maintains a permanent home outside New York during the entire tax year, and spends no more than 30 days in New York during the tax year, the member is considered a nonresident for tax purposes and not subject to New York tax. A service member also is considered a nonresident if they were in a foreign country for at least 450 days during a 548-consecutive-day period, did not spend more than 90 days in New York during that period, and did not maintain a permanent home in New York where a spouse or dependent child spent more than 90 days.
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Exempt.
Accepts computer forms? Yes. Forms provided by software companies must have received prior department approval.
Allows electronic filing? Yes, by preparers, software publishers and electronic service providers participating in state's electronic filing program.
Nonresident filing: Only for income other than service pay earned from New York sources. Military income is included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Generally, no. However, if a joint federal return was filed and one spouse is a New York State resident and the other spouse is a nonresident or part-year resident, separate New York State returns must be filed.
Maximum tax rate: 6.85

NORTH CAROLINA

     N.C. Dept. of Revenue
     P.O. Box 25000
     Raleigh, NC 27640
     (919) 733-3991
     Forms: (919) 715-0397
     Web site: http://www.dor.state.nc.us/DOR/

Military income: Legal residents taxed following federal tax rules, including POW/MIA benefits. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Retired pay and SBP subject to a deduction from federal taxable income of up to $4,000.
Accepts computer forms: North Carolina will accept copies of Form D-400 only, provided the reproductions meet certain requirements.
Allows electronic filing? Yes.
Nonresident filing: Only for income other than service pay earned from North Carolina sources. Military income is not included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes, if taxpayers file a joint federal return and both spouses are residents or both spouses had North Carolina taxable income.
Maximum tax rate: 7.75

NORTH DAKOTA

     State Tax Commissioner
     State Capitol
     600 E. Boulevard Ave.
     Bismarck, ND 58505-0599
     In state: (800) 638-2901
     Out of state: (701) 328-3450
     Web site: http://www.state.nd.us/taxdpt

Military income: Legal residents taxed following federal tax rules. However, if Form 37 (long form) is used, an exclusion of up to $1,000 of compensation for active-duty service or for service in the Reserve or N.D. National Guard is allowed. In addition, if stationed outside the United States for at least 30 days, an exclusion of up to $300 of compensation for active-duty service is allowed for each month (or fraction thereof) of service outside the United States; however, field grade and general officers are not eligible for this exclusion. All service personnel are advised to complete both Form 37 and Form 37-S (short form) to see which yields the lower tax.
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Taxed to the same extent as on federal level; but if Form 37 (long form) is used, an exclusion is allowed if a retiree is at least 50 years of age. The exclusion is equal to the lesser of (1) the total amount of taxable military retirement benefits reduced by any Social Security retirement benefits received or (2) $5,000 reduced by any Social Security retirement benefits received. SBP benefits are taxed to the same extent as on the federal level.
Accept computer forms/electronic filing: All forms other than the officially printed forms must have prior approval from the office of the state tax commissioner.
Allows electronic filing? Yes.
Nonresident filing: Only for income other than service pay earned from South Dakota sources. Military income is included in figuring tax rate on nonmilitary income if the short form, 37-S, is used; it is not, if Form 37 is used.
Permit separate returns even if a joint federal return is filed: Generally, no. However, separate state returns must be filed if only one spouse is a resident of North Dakota. Schedule SF must be attached to Form 37-S or Form 37 if the exception applies.
Maximum tax rate: Flat rate of 14 percent of adjusted federal tax liability

OHIO

     Taxpayer Services
     P.O. Box 2476
     Columbus, OH 43266
     In state: (800) 282-1780
     Out of state: (614) 846-6712
     Web site: http://www.state.oh.us/tax/

Military income: Legal residents taxed following federal tax rules, combat-zone pay is excluded. Ohio will allow service members to calculate a resident tax credit if nonmilitary pay was taxed by another state.
Exit bonuses/separation pays: Taxed.
Retired pay/survivor benefits: Allowed a graduated credit against the income tax based on the portion of the retirement income included in the adjusted gross income. Retired pay gets a graduated tax credit; survivor benefits are excluded from income tax through a deduction.
Accepts computer forms? Computer forms accepted, but first send a sample of the return to Ohio's Department of Taxation for approval.
Allows electronic filing? Yes.
Nonresident filing: Only for income from a nonmilitary source earned in Ohio. Military income is included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: No.
Maximum tax rate: 7.2 percent

OKLAHOMA

     Taxpayer Assistance Division
     2501 Lincoln Blvd.
     Oklahoma City, OK 73194
     In state: (800) 522-8165
     Out of state: (405) 521-3160
     Forms: (405) 521-3108
     Web site: http://www.oktax.state.ok.us/

Military income: Legal residents taxed following federal tax rules. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes." The first $1,500 of active-duty pay is exempt from Oklahoma income tax.
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Up to $5,500 of retirement pay taxed for federal purposes is exempt from Oklahoma income tax. POW/MIA benefits are tax exempt. SBP benefits are taxed to the same extent as on the federal level.
Accepts computer forms? Yes, so long as the forms are from an approved vendor.
Allows electronic filing? Only through the federal-state electronic filing program.
Nonresident filing: Only for income other than service pay earned from Oklahoma sources. Tax is determined as if all income were earned in Oklahoma, then a ratio of the Oklahoma income to total income is applied to that tax to arrive at Oklahoma tax.
Permit separate returns even if a joint federal return is filed: Yes, in limited circumstances.
Maximum tax rate: 10 percent

OREGON

     Revenue Building
     Tax Help, Room 135
     955 Center St., NE
     Salem, OR 97310
     In state: (800) 356-4222
     Out of state: (503) 378-4988
     Web site: http://www.dor.state.or.us 

Military income: Legal residents taxed following federal tax rules. Totally or partially exempt in the following: (1) subtraction for all active-duty pay earned outside Oregon in the year of entry or discharge; (2) resident treated as nonresident for tax purposes; (3) all active-duty pay earned outside the state and associated with combat activities in the Persian Gulf is exempt for 1998; (4) additional deduction of up to $3,000 of active-duty pay. MIA/POW benefits are taxed to the same extent as on the federal level.
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Due to a June Oregon Supreme Court ruling, eligible federal retirees, including military personnel, no longer have to pay Oregon tax on their federal pension. Retirees who worked for the federal government prior to Oct. 1, 1991, but who did not retire until after that date, must continue to pay taxes on the portion of their federal pension attributable to federal service after Oct. 1, 1991. Retirement income credit allowed on all retirement income of retirees age 61 or older on Dec. 31, 1998. The ability to claim the credit also is dependent on taxpayer's household income and the amount of Social Security income received.
Accepts computer forms: Computer forms accepted. Paper and print must conform to Oregon Administrative Rule 150-314.385(1)-(D); available upon request.
Allows electronic filing? Yes.
Nonresident filing: Only for income from a nonmilitary source earned in Oregon. Military income is not included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes, if spouses' residences are not the same, such as full-year/part-year.
Maximum tax rate: 9 percent

PENNSYLVANIA

     Bureau of Individual Taxes
     Taxpayer Inquiry Unit
     5th Floor, Strawberry Square
     Harrisburg, PA 17128
     (717) 787-8210
     Forms/refund information: (888) 728-2937
     In state: (800) 362-2050
     Out of state: (717) 787-8094
     Web site: http://www.revenue.state.pa.us

Military income: Legal residents taxed following federal tax rules. Exempt if active duty or active duty for training outside state; POW/MIA benefits exempt. Copies of orders must be attached to claim a refund erroneously withheld from wages while stationed on active duty outside the state.
Exit bonuses/separation pays: Taxed if received by state residents while within the state.
Retired pay/survivor benefits: No tax on commonly recognized retirement or death benefits.
Accept computer forms/electronic filing: Computer forms accepted if the specifications of Pennsylvania's Department of Revenue are met.
Allows electronic filing? Yes, as part of the federal-state electronic filing program. Federal and state returns must be filed together in one transmission. Copies of orders to be submitted by military members as evidence of active-duty pay outside of Pennsylvania must be submitted as a paper document when the Pennsylvania return is filed electronically.
Nonresident filing: Only for income other than service pay earned from Pennsylvania sources. Military income is not included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes.
Maximum tax rate: Flat rate of 2.8 percent

RHODE ISLAND

     R.I. Div. of Taxation
     1 Capitol Hill
     Providence, RI 02908
     (401) 222-1040
     Forms: (401) 222-1111
     Web site: http://www.doa.state.ri.us/tax/

Military income: Legal residents taxed following federal tax rules, including POW/MIA benefits. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Taxed to the same extent as on the federal level. Accepts computer forms? Yes.
Allows electronic filing? Yes.
Nonresident filing: Only for income other than service pay derived from Rhode Island sources. Military income is included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes, if one spouse is a resident of Rhode Island and the other is a nonresident or part-year resident. Military income is included in figuring tax rate on nonmilitary income.
Maximum tax rate: Flat rate of 27 percent of the taxpayer's federal income tax liability. Will be reduced to 25 percent at the rate of 1/2 percent per year for next four years.

SOUTH CAROLINA

     S.C. Dept. of Revenue
     P.O. Box 125
     Columbia, SC 29214
     803-898-5000
     Forms: (800) 768-3676
     Web site: http://www.dor.state.sc.us/ 

Military income: Legal residents taxed following federal tax rules, including POW/MIA benefits. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxed.
Retired pay/survivor benefits: Retired pay is taxed. Retiree with 20 or more years of active duty may get a retirement deduction. Military retirees with 20 or more years of active duty must make an irrevocable election to deduct $3,000 per year, or claim no deduction until age 65 and then deduct $10,000 per year. The election is made on the income tax return and must be made in the first year retirement income is received. This deduction extends to the surviving spouse. SBP benefits are taxed to the same extent as on the federal level.
Accepts computer forms/electronic filing: S.C. Dept. of Revenue-approved computer forms accepted.
Allows electronic filing? Yes. Filing by phone permitted for taxpayers eligible for S.C. Telefile program.
Nonresident filing: Only for income other than service pay earned from South Carolina sources. Military income is not included in figuring tax rate on nonmilitary income. Deductions and exemptions are prorated.
Permit separate returns even if a joint federal return is filed: No.
Maximum tax rate: 7 percent

SOUTH DAKOTA

     Web site: http://www.state.sd.us/state/executive/revenue/revenue.html

No state income tax

TENNESSEE

     Dept. of Revenue
     Jackson State Office Bldg.
     500 Deaderick St.
     Nashville, TN 37242
     In state: (800) 342-1003
     Out of state: (615) 741-2594
     Web site: http://www.state.tn.us/revenue/

No state income tax on earned income (6 percent tax on interest and dividends over $1,250 for single person or $2,500 for married persons filing jointly).
Accept computer forms/electronic filing: State accepts forms downloaded from the web page. Electronic filing is accepted.

TEXAS

     Web site: http://www.window.state.tx.us/

No state income tax

UTAH

     Utah Tax Commission
     210 N. 1950 W.
     Salt Lake City, UT 84134
     Salt Lake City: (801) 297-2200
     Other: (800) 662-4335
     Web site: http://www.tax.ex.state.ut.us/

Military income: Legal residents taxed following federal tax rules, POW/MIA benefits included. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes." A tax credit is allowed for tax paid to another state for income other than military pay.
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Both are taxed.
Accepts computer forms? Computer forms accepted if first approved by the state's tax commission and is compatible with its automated processing system.
Allows electronic filing? Yes.
Nonresident filings: Only for income other than military pay earned from Utah sources. Military income is included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: If a husband and wife (one being a resident, the other a nonresident) file a joint federal income tax return, they may file separate returns with the state if they compute their state taxable incomes as if their federal income had been computed separately.
Maximum tax rate: 7 percent

VERMONT

     Vermont Dept. of Taxes
     Taxpayer Services Division
     109 State St.
     Montpelier, VT 05609
     (802) 828-2865
     Web site: http://www.state.vt.us/tax/

Military income: Legal residents taxed following federal tax rules. POW/MIA benefits are exempt. The first $1,500 of National Guard pay for unit training assemblies in the state is exempt if the person was enlisted for the full calendar year, attended all 48 unit training assemblies or the adjutant general certified completion of all unit training assemblies, and had a federal adjusted gross income of less than $47,000 in prior taxable year.
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Taxed to the same extent as on the federal level.
Accept computer forms? Computer forms not accepted unless the form looks like an exact black and white copy of the original form.
Allows electronic filing? Yes.
Nonresident filing: Only for income other than service pay derived from Vermont sources. Military income is included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: No, unless one of the spouses is a nonresident who has no Vermont income.
Maximum tax rate: Flat rate of 25 percent of federal tax liability, income adjustments may be applicable

VIRGINIA

     Customer Services Section
     P.O. Box 1115
     Richmond, VA 23218-1115
     (804) 367-8031
     Forms: (804) 367-8055
     Web site: http://www.state.va.us/tax/tax.html

Military income: Legal residents taxed following federal tax rules, including POW/MIA benefits. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Legal residents are taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Legal residents taxed to the same extent as on the federal level.
Accept computer forms? Yes, but computer forms must be approved by the state's Department of Taxation.
Allows electronic filing? Yes.
Nonresident filing: For income other than service pay derived from Virginia sources, file Form 763. Military income is not included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: If you are a nonresident and your spouse is a resident of Virginia, you may not file a joint Virginia return.
Maximum tax rate: 5.75 percent

WASHINGTON

     Web site: http://www.wa.gov/DOR/wadorfrm.htm 

No state income tax

WEST VIRGINIA

     W.Va. Taxpayer Service Div.
     P.O. Box 3784
     Charleston, WV 25337
     In state: (800) 982-8297
     Out of state: (304) 558-3333
     Web site: http://www.state.wv.us/taxrev/

Military income: Legal residents taxed following federal tax rules, including POW/MIA benefits. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: First $2,000 received to the extent includable in federal tax income is exempt; SBP income is taxed to the same extent as on the federal level.
Accept computer forms? Yes, but form must conform to the physical layout of West Virginia's Department of Tax and Revenue's forms. A publication is available.
Allows electronic filing? Yes, for resident taxpayers only. Federal and state returns must be transmitted at the same time.
Nonresident filing: Only for income other than service pay derived from West Virginia sources. Military income is included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes.
Maximum tax rate: 6.5 percent

WISCONSIN

     Wis. Dept. of Revenue
     P.O. Box 8903
     Madison, WI 53708
     (608) 266-2772
     Forms: (608) 266-1961
     Web site: http://www.dor.state.wi.us/

Military income: Legal residents taxed following federal tax rules. Any benefit excluded from federal tax is excluded from state tax. See "What you can excluded on your federal taxes."
Exit bonuses/separation pays: Taxed to the same extent as on the federal level.
Retired pay/survivor benefits: Both exempt if retirement benefit is paid on the account of a person who was a member of, or was retired from, the military retirement system as of Dec. 31, 1963. Both taxable if retirement benefit is paid on an account established after Dec. 31, 1963.
Accepts computer forms: Yes.
Allows electronic filing: Yes.
Nonresident filing: Only for income other than service pay derived from Wisconsin sources. Military income is not included in figuring tax rate on nonmilitary income.
Permit separate returns even if a joint federal return is filed: Yes.
Maximum tax rate: 6.77 percent

WYOMING

     Web site: http://revenue.state.wy.us/ 

No state income tax

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