The Short Answer
Active-duty pay of resident members in the active or reserve components is not taxed by Minnesota (subtraction from income). Your base pay is set by the federal pay table — identical to every other state for your rank and years of service. What actually changes in Minnesota is your BAH (averaging $1,400/mo without dependents and $1,700/mo with dependents) and how Minnesota treats the taxable portion of your pay.
State tax status: ✗ TAXED
2026 Worked Example — E-5, 6 Years, With Dependents in Minnesota
Here is how the math actually lands for a mid-career enlisted member stationed in Minnesota, built the way I read my own LES. Base pay and BAS are federal; the Minnesota BAH figure is the state average.
| Monthly line item | Amount | Taxable? |
|---|---|---|
| Base pay (E-5, over 6 yrs) | $3,874 | Yes (federal + state) |
| BAH with dependents (Minnesota avg) | $1,700 | No — tax-free |
| BAS (enlisted) | $476.95 | No — tax-free |
| Gross monthly entitlements | $6,050.95 | — |
| Taxable income (base pay only) | $3,874 | — |
| Est. Minnesota state income tax | varies — see notes | — |
Only the $3,874 of base pay is taxable — the $2,176.95 of BAH + BAS is completely tax-free. Run your exact rank, ZIP, and dependency status in the Military Pay Calculator for a precise estimate.
How Minnesota Taxes Each Type of Military Pay
Active-Duty Base Pay
Active-duty pay of resident members in the active or reserve components is not taxed by Minnesota (subtraction from income).
Guard & Reserve Drill Pay
Minnesota allows a subtraction for National Guard and Reserve active-service pay, effectively exempting qualifying drill/duty pay.
Military Retirement Pay
Military retirement pay may be fully subtracted, or the taxpayer may instead claim a credit for past military service; only one benefit may be used, so verify eligibility.
VA Disability Compensation
VA disability compensation is exempt federally and is not taxed by Minnesota.
SCRA & Residency in Minnesota
Under SCRA, a nonresident servicemember stationed in Minnesota is not taxed by Minnesota on military pay.
This is the single most misunderstood rule in military pay. Your home of record / state of legal residence — not your duty station — generally determines who can tax your military pay. Changing it is a deliberate act, not something that happens automatically when you PCS.
Major Military Installations in Minnesota
- Camp Ripley
- Minneapolis-St. Paul Air Reserve Station
- Duluth Air National Guard Base
BAH is set by the Military Housing Area covering your duty ZIP. Verify your exact rate at the official DoD BAH lookup.
Official Sources
FAQ — Military Pay in Minnesota
Does Minnesota tax my military base pay?
Active-duty pay of resident members in the active or reserve components is not taxed by Minnesota (subtraction from income).
Is my BAH taxed in Minnesota?
No. BAH is federally tax-free and is never counted as income for Minnesota state income tax, regardless of how Minnesota treats base pay.
Does Minnesota tax military retirement pay?
Military retirement pay may be fully subtracted, or the taxpayer may instead claim a credit for past military service; only one benefit may be used, so verify eligibility.
I'm stationed in Minnesota but my home of record is elsewhere — who taxes me?
Under SCRA, a nonresident servicemember stationed in Minnesota is not taxed by Minnesota on military pay.