New York State Division of Veterans' Affairs

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New York State Income Tax Exemption for Military Pay

Combat Zone pay

Military pay received for active service as a member of the United States Armed Services in an area designated as a combat zone is exempt from New York State, New York City, and Yonkers income taxes. Service members are entitled to a New York subtraction modification in computing New York adjusted gross income for the amount of combat pay included in federal adjusted gross income.

Non-Combat Zone pay

If you are a New York State resident and your permanent home (domicile) was in New York State when you entered the military but you were assigned to duty outside the state, you are still a New York State resident.

Your military pay is subject to New York State income tax to the same extent it is subject to federal income tax.

If your permanent home (domicile) was in New York State when you entered the military but you meet the conditions for nonresident status, your military pay is not subject to New York State income tax.

If your permanent home was not New York State when you entered the military but you were assigned to duty in New York State, you do not become a New York State resident even if you have a permanent place of abode here. You are a nonresident and your military pay is not subject to New York State income tax.

If you are a nonresident, other income that you receive from New York State sources (including your spouse's income) may be subject to tax.

More Information

To learn more about NYS tax exemptions for Veterans and access forms, visit the Tax and Finance military webpage at: http://www.tax.ny.gov/pit/file/military_page.htm

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