Updated September 5, 2026. Quick answer: Oklahoma fully exempts 100 percent of military retirement pay from state income tax, but civilian retirement income is capped much lower right now, up to $10,000 per person for Oklahoma or federal government pensions and a separate $10,000 per person for private pensions, IRA, and 401k or 403b distributions, with income above those caps taxed as ordinary income.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how Oklahoma taxes retirement income generally.
Pending, not current law: Two 2025 bills would expand these exclusions. HB 2190 would add a separate exclusion for federal civil service retirement but remains pending in a House committee with no further action recorded. HB 2194 would raise the general retirement income exclusion from $10,000 to $20,000 and passed the House 73 to 1 in March 2025 but was still pending in the Senate as of the last recorded action. Neither bill has been signed into law, so the $10,000 caps described above remain current law.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Oklahoma government pensions, including the Public Employees Retirement System, Teachers’ Retirement System, Law Enforcement Retirement System, Firefighters Pension System, Police Pension System, and various county and municipal systems, along with federal civil service retirement, can exclude up to $10,000 per individual, not to exceed the amount included in federal adjusted gross income. Amounts above $10,000 are taxed as ordinary income. |
|---|---|
| Private (employer) pensions | Qualifying private retirement benefits, including employer pension plans under Internal Revenue Code section 401 and similar plans, can exclude up to $10,000 per individual under a separate provision, with no income eligibility limit since the 2010 tax year. Amounts above $10,000 are taxed as ordinary income. |
| Federal government pensions (FERS/CSRS) | Federal civil service retirement is grouped with Oklahoma government pensions under the same $10,000 per individual exclusion. The current statute text does not create a separate, larger exclusion for CSRS specifically or treat FERS differently from CSRS, contrary to some secondary-source claims. |
| Military retirement pay | For tax year 2022 and all subsequent tax years, 100 percent of retirement benefits received from any component of the U.S. Armed Forces are exempt from Oklahoma taxable income. Before 2022, the exclusion was the greater of 75 percent of the benefit or $10,000. |
| IRA and 401(k)/403(b) distributions | IRA distributions under Internal Revenue Code section 408, and similar accounts such as simplified employee pensions, fall under the same $10,000 per individual exclusion described for private pensions, with no income cap since 2010. |
| General retirement-income exclusion | There is no additional broad age based exclusion beyond the two category specific $10,000 exclusions, government and federal civil service on one hand, private and IRA on the other, plus the full military retirement exemption. |
Coordinate this with your overall retirement plan
An adviser can help weigh how much of a pension or IRA withdrawal to take this year, whether a Roth conversion makes sense before or after a move, and how state tax interacts with the rest of your plan, but that does not replace the numbers in your own return.
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Social Security
Oklahoma fully exempts Social Security benefits included in federal adjusted gross income from state tax, with no dollar cap; see the sibling page for details. Social Security has its own rules in every state; see the full breakdown in how Oklahoma taxes retirement income generally.
Statute and sources
Governing citation: 68 O.S. sec. 2358, paragraphs 8, 13, and 17.
- Oklahoma State Courts Network, full text of 68 O.S. Section 2358
- Oklahoma Legislature, HB 2190 bill status
- Oklahoma Legislature, HB 2194 bill status
Read September 5, 2026.
Related: how Oklahoma taxes retirement income generally · does Oklahoma tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.