Updated October 4, 2026. Quick answer: No. The 2025 PA-40 instructions list “Military pension benefits” as income not taxable for Pennsylvania personal income tax, and the Department’s tax guide says retired or retainer pay computed under Chapter 71 of Title 10 is exempt.
More state retirement-income schedules, line by line: Pennsylvania PA-40 retirement income.
How Pennsylvania treats military retired pay
| Item | What the documents say |
|---|---|
| Treatment | Not taxable for Pennsylvania personal income tax |
| Cap or age | None printed |
| Rate on other income | 3.07 percent for 2025 |
A $30,000 example
A retiree with $30,000 of military retired pay owes Pennsylvania $0 of income tax on it.
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What changes in 2026
No 2026 change is printed in the documents read.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Publication 3, Armed Forces’ Tax Guide.
Related: whether Pennsylvania taxes pensions, how Pennsylvania taxes retirement income, military retirement pay by state, and the military retirement calculator.
Sources
- 2025 PA-40 Personal Income Tax Return Instructions: https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforindividuals/pit/documents/2025/2025_pa-40in.pdf
- PA Personal Income Tax Guide, Gross Compensation: https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/papersonalincometaxguide/documents/pitguide_grosscompensation.pdf
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.