Is military retirement taxed in Rhode Island?

How it works in Rhode Island

Take the taxable military pension from line 5b of your federal Form 1040 and enter it on RI Schedule M, line 1v, which the 2025 schedule labels as the modification for taxpayers receiving military service pensions under RIGL §44-30-12(c)(11). Schedule M adds its decreasing modifications on line 1y and enters the total as a negative amount, and the schedule goes in with your RI-1040.

No other test applies. The Division's Publication 2026-01, its retirement income guide for tax year 2025, says the military modification has no income or age requirements; the only condition is that the pension is subject to federal income tax. Line 1t, the general pension and annuity modification, is different: it requires full retirement age (born on or before March 1, 1959, for 2025) and federal AGI of $107,000 or less for a single filer.

Keep the two lines apart. Line 1t allows up to $50,000 per person of other pension and annuity income for 2025, up from $20,000, but the instructions say not to include any military service pension there. The statute says the military modification, alone or with the general one, may never exceed the military pension received, and the Division applies that as a bar on claiming the same income twice: Example 5 in Publication 2026-01 has a retiree subtract $25,000 of military pay on the military modification and $17,000 of his own 401(k) withdrawals on the general one. On an assumed $36,000 pension, line 1v saves $1,350 at Rhode Island's 3.75% bottom rate and up to $2,156 at the 5.99% top rate.

You still file. The 2025 instructions require an RI-1040 from every resident who must file a federal return, even when line 1v removes the whole pension. To correct a 2023, 2024 or 2025 return that taxed the pension, file an RI-1040 with the Amended checkbox and the Supplement to Individual Income Tax Return; § 44-30-87 allows three years from filing or two years from payment, whichever expires later.

Tax year 2022 cannot be fixed with line 1v. The Division's 2023 guide, written for 2022 returns, counted military retirement pay only toward the general modification, up to $15,000 and only for filers at full retirement age under the income limit, and announced the full military exemption as coming for tax year 2023.

What trips Rhode Island retirees up

• The statute reads "For the tax years beginning on January 1, 2023", without the usual "or after". The Division treats the exemption as continuing: its 2025 instructions and Publication 2026-01 both say the modification applies for tax years beginning on or after January 1, 2023, and the 2025 Schedule M carries line 1v.
• Rhode Island borrows "military service" from 20 C.F.R. § 212.2, a Railroad Retirement Board rule: active service in the land, naval or air forces, with reserve service counted only while ordered to active duty, and Merchant Marine service expressly not creditable. The Division says only that active service in the armed forces meets the definition; it has not addressed NOAA or Public Health Service retirees, or whether a Guard or Reserve retirement built mostly on drill points counts in full (read October 10, 2026).
• Publication 2026-01 extends the modification to a surviving spouse who receives military pension benefits on behalf of a spouse who served, but it says nothing about a former spouse's court-ordered share of the retired pay.
• The Division's own 2025 documents disagree on the joint limit for the general line 1t modification: the RI-1040 instructions print $133,750, while Publication 2026-01 uses $133,500. The difference matters only for line 1t, never for the military line. The same guide says up to $50,000 of line 5b income qualifies "less any amount claimed under the Military Service Pension Modification", and none of its examples shows whether a large military pension also shrinks one person's $50,000 line 1t cap.