Ricketts: Exempt military retirement from federal income tax

Nebraska Public Media

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Sen. Pete Ricketts is proposing to end federal taxation of military retirement income.

Nebraska ended state taxes on military retirement income in 2022, when Ricketts was governor. Now, he wants to exempt military retirement from federal income taxes, too. In a conference call Wednesday, Ricketts talked about what that would look like.

“Consider an enlisted soldier, sailor or airman who serves for 20 years: My bill would result in tax relief of over $6,000 a year,” Ricketts said.

However, the proposal would not help most veterans. A Census Bureau report two years ago found that only 7.3 percent of veterans serve long enough to qualify for military retirement. A Rand Corporation study this year found that those who get military retirement have higher incomes than other veterans: $8,400 more if they have less than a bachelor’s degree, and $44,600 if they have a bachelor’s degree or higher.

Ricketts was asked why he would favor military retirees over other veterans.

“These are folks who served there 20 years, and that’s what we’re looking to do is say ‘Hey if these folks served 20 years and they have military retirement benefits, then let’s make them not taxable at the federal level like we do at the state level,’” he said. “If you’re not receiving those benefits we can’t give them tax relief on benefits they’re not receiving.”

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