Updated October 4, 2026. Quick answer: No. Michigan Treasury says “Military retirement benefits paid to retirees of the armed forces of the” United States are exempt from individual income tax, and they come off the return on Schedule 1, line 11, with no dollar cap or age printed.
How Michigan treats military retired pay
| Item | What the documents say |
|---|---|
| Treatment | Exempt from individual income tax; subtracted on Schedule 1, line 11 to the extent included in adjusted gross income |
| Who claims it | The participant or, in case of death or disability, the surviving spouse |
| Civilian military pension | A civilian pension from the military may be claimed on Form 4884 if eligible |
| Cap or age | None printed |
| Rate on other income | 4.25% for tax year 2025 |
A $30,000 example
A retiree with $30,000 of military retired pay included in adjusted gross income subtracts all $30,000 on Schedule 1, line 11, so none of that pay is left to tax.
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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 Michigan taxes pensions, how Michigan taxes retirement income, military retirement pay by state, and the military retirement calculator.
Sources
- Are military retirement benefits exempt from Michigan individual income tax?: https://www.michigan.gov/taxes/questions/iit/accordion/military/are-military-retirement-benefits-exempt-from-michigan-individual-income-tax
- 2025 MI-1040 Individual Income Tax Forms and Instructions: https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/IIT/TY2025/MI-1040-Book.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.