10 Worst States for Military Retirees

7. New Mexico

• Lowest tax rate: 1.7 percent (on up to $8,000 of taxable income for married joint filers and up to $5,500 for single filers)
• Highest tax rate: 4.9 percent (on more than $24,000 of taxable income for married joint filers and more than $16,000 for single filers)

You don’t have the luxury of receiving special treatment here neither. Those who are 65 or older may get an $8,000 general income exemption, but it’s not that easy. In order to qualify for this exemption, your adjusted gross income has to be less than $28,500 for single filers and $51,000 for married couples filing jointly.

If you’re celebrating your 100th birthday, you’ll see some rays of sunshine: your entire income is exempt!

8. Virginia

• Lowest tax rate: 2 percent (on up to $3,000 of taxable income)
• Highest tax rate: 5.75 percent (on more than $17,000 of taxable income)

Congressional Medal of Honor recipients don’t have to pay taxes here. But, if you’re not a Congressional Medal of Honor recipient, forget about this privilege, you’ll have to pay taxes on your military pension. However, Virginia offers a deduction against all income based on your age.

But who qualifies for this deduction? For instance, people born on/before January 1, 1939, qualify for a $12,000 deduction.