Mississippi retired pay
Is military retirement taxed in Mississippi?
Not taxed
Exempt in Total, No Age Test.
No. Miss. Code Ann. § 27-7-15(4)(k) removes retirement allowances, pensions and annuities paid by any retirement system of the United States government from gross income, so military retired pay is exempt in full, at any age and with no cap. The condition that matters is the type of payment: separation pay and early distributions taxed under federal law are not retirement income and stay taxable.
- The law
- Miss. Code Ann. § 27-7-15(4)(k)
- Current rule since
- No start year published by the Department of Revenue; the same paragraph (k) wording appears in 2000 Senate Bill 2210, which reprinted § 27-7-15, so the full exclusion is at least that old (read October 10, 2026)
- Where you claim it
- Nothing to claim: leave the pension off 2025 Form 80-105, line 46 (Taxable pensions and annuities); if DFAS withheld Mississippi tax, list the 1099-R on Form 80-107 and claim the withholding on line 24
Read on Mississippi’s own sources October 10, 2026
What Mississippi’s rule is worth on your retired pay
Enter your annual taxable retired pay (box 2a of your DFAS or Coast Guard 1099-R). The rate starts at Mississippi’s 4% rate on taxable income over $10,000 for 2026 (4.4% for 2025) for tax year 2026; change it to your own bracket if you know it.
One rate applied to the whole amount, not Mississippi’s full return: brackets, other income, deductions and credits change the real figure. Use it to compare, then check the state’s own form instructions.
How it works in Mississippi
Mississippi does not start from federal AGI. Form 80-105 rebuilds income line by line, and the 2025 instructions for line 46, Taxable pensions and annuities, say not to report retirement income there because retirement income from federal, state, and private retirement systems is exempt in total. The DFAS 1099-R never enters the Mississippi return as income, so there is no subtraction line to find.
The legal source is paragraph (k) of § 27-7-15(4), which lists the Social Security Act, the Railroad Retirement Act, the Federal Civil Service Retirement Act or any other retirement system of the United States government, and subsection (4) says listed items are not gross income at all. Military retired pay fits the federal-system wording, so the paragraph carries no cap, age test or service minimum. The age and years-of-service language in Department rule 35.III.2.07.102 governs deferred compensation plans, not a federal pension.
If you asked DFAS to withhold Mississippi tax, you file to get it back. List the 1099-R on Form 80-107, the Income/Withholding Tax Schedule, carry the Mississippi withholding to line 24 of Form 80-105, and attach the 1099-R. Then update your state withholding election with DFAS so the overpayment stops.
Worked example with an assumed $42,000 pension: the exclusion is worth up to $1,848 on the 2025 return at the 4.4% rate that applies to taxable income over $10,000, and up to $1,680 for 2026, when 2025 House Bill 1 drops that rate to 4%. The first $10,000 of taxable income is taxed at 0%, so a retiree with little other income saves less. The same law schedules 3.75% for 2027, 3.5% for 2028, 3.25% for 2029 and 3% from 2030.
Because paragraph (k) keeps the pension out of gross income, it does not count toward the 2025 filing thresholds of $8,300 for a single resident or $16,600 for a married couple, plus $1,500 per dependent. The Department's FAQ says Mississippi also leaves Social Security untaxed. A retiree living on those two checks may have no Mississippi return to file unless Mississippi tax was withheld and should come back.
Survivor Benefit Plan annuities
Exempt. Paragraph (k) says its exemption shall be available to the spouse or other beneficiary at the death of the primary retiree, and Department of Revenue rule 35.III.2.07.105 says the exemption extends to the spouse or other beneficiary on the retiree's death. The Department does not name SBP annuities separately (read October 10, 2026).
Active-duty pay in Mississippi
Taxed for a Mississippi resident wherever stationed (Department FAQ and rule 35.III.7.04.101), except combat zone pay. Guard and Reserve members exclude up to $15,000 of Guard or Reserve pay on Form 80-105 line 55, which the FAQ says covers drills, annual training and state active duty.
Missed it in an earlier year?
A taxpayer may apply for revision of a return within 3 years of the due date, or 3 years from the date filed if an extension was granted; attach a copy of the original return and Form 80-107 (2025 Form 80-100 instructions, read October 10, 2026).
What trips Mississippi retirees up
- An old Department rule still on the books contradicts the statute. Rule 35.III.7.04.105 of Title 35, Part III of the Mississippi Administrative Code says armed forces retirement allowances above $6,000 a year must be included in gross income, and caps Guard and Reserve pay at $6,000. Paragraph (m) of the statute now allows $15,000 of Guard and Reserve pay, and both the 2025 instructions and rule 35.III.2.07.100 exempt federal retirement pay in full, so treat the $6,000 text as stale.
- Separation pay is not retirement income. The 2025 instructions say it does not qualify for the exemption, so separation pay paid to a member who leaves before retirement is taxable, as are pension or annuity amounts taxed as early or excess distributions on federal Form 5329.
- The $15,000 Guard and Reserve exclusion on line 55 is for pay while you serve. Once Reserve retired pay starts, it is a payment from a federal retirement system under paragraph (k), exempt with no dollar limit and never entered on line 55.
Federal side: DFAS reports retired pay on Form 1099-R, and the IRS taxes it as a pension. VA disability compensation is not taxable income under federal law (IRS Publication 525). The SCRA’s tax-home rule (50 U.S.C. § 4001) protects servicemembers on orders, not retirees, so where a retiree lives decides which state taxes the pension. Compare every state on the 51-state ledger. Mississippi’s other servicemember protections are on the Mississippi SCRA page.
Frequently asked questions
Does Mississippi tax military retirement?
No. Miss. Code Ann. § 27-7-15(4)(k) says retirement allowances, pensions and annuities paid under any retirement system of the United States government are not gross income, which covers military retired pay at any age and in any amount. The 2025 Form 80-100 instructions tell you not to report retirement income on Form 80-105 line 46 because federal, state and private retirement income is exempt in total. The Department of Revenue's FAQ adds that early distributions are not retirement income and may be taxed (read October 10, 2026).
Do I have to file a Mississippi return if my only income is military retirement?
Often not. The 2025 instructions require a resident return when gross income exceeds $8,300 for a single filer or $16,600 for a married couple, plus $1,500 per dependent, and § 27-7-15(4)(k) says military retired pay is not gross income. Social Security is also untaxed in Mississippi, according to the Department of Revenue's FAQ. File anyway if DFAS withheld Mississippi tax: list the 1099-R on Form 80-107 and claim the withholding on Form 80-105 line 24 to get it refunded (read October 10, 2026).
Is SBP taxed in Mississippi?
No. The last sentence of § 27-7-15(4)(k) says the exemption for federal retirement allowances shall be available to the spouse or other beneficiary at the death of the primary retiree, and Department of Revenue rule 35.III.2.07.105 repeats that the exemption extends to the spouse or other beneficiary. A Survivor Benefit Plan annuity paid by DFAS therefore stays off Form 80-105, line 46, just as the retiree's own pension did. The Department's pages do not mention SBP by name (read October 10, 2026).
Sources, read October 10, 2026
- 2025 Form 80-100 Resident, Non-Resident and Part-Year Resident Income Tax Instructions (Mississippi Department of Revenue)
- 2025 Form 80-105 Resident Individual Income Tax Return (Mississippi Department of Revenue)
- Individual Income Tax Frequently Asked Questions (Mississippi Department of Revenue)
- General Information: Tax Rates (Mississippi Department of Revenue)
- Title 35, Part III, Income and Franchise Tax regulations (Mississippi Administrative Code, Secretary of State)
- House Bill 1529, 2022 Regular Session, as sent to the Governor and approved March 17, 2022, reenacting Section 27-7-15 in full (Mississippi Legislature)
- House Bill 489, 2026 Regular Session, as passed by the House, reprinting current Section 27-7-15 (Mississippi Legislature)
- House Bill 1, 2025 Regular Session, as signed by the Governor (Mississippi Legislature)
- Senate Bill 2210, 2000 Regular Session, as introduced (Mississippi Legislature)
Heads up: SCRA Saver publishes general information, not legal or financial advice. Laws change and every situation differs. Confirm details with your installation legal assistance office (free for service members) or a licensed professional.