10 Worst States for Military Retirees

1. California

• Lowest tax rate: 1 percent (on up to $17,618 of taxable income for married joint filers and up to $8,809 for single filers)
• Highest tax rate: 13.3 percent (on more than $1,181,484 of taxable income for married joint filers and $1 million for single filers)

The Golden State is not kind and very generous to its military retirees. California taxes the entire military income along with state, private, local, and other types of pensions. And it doesn’t matter where you served while on duty; if you’re a California resident and a retired veteran, you can’t escape the state tax.

2. Vermont

• Lowest tax rate: 3.35 percent (on up to $66,150 of taxable income for married joint filers and up to $39,600 for single filers)
• Highest tax rate: 8.75 percent (on more than $243,750 of taxable income for married joint filers and more than $200,200 for single filers)

Just like the Golden State, Vermont taxes the entire amount of money that comes from military pensions. In fact, it taxes the vast majority of retirement income sources. Vermont’s income tax rate isn’t helpful either: the highest rate it’s a burden for most retired veterans who have other sources of income.