Oklahoma Administrative Code
Title 710 - Oklahoma Tax Commission
Chapter 50 - Income
Subchapter 15 - Oklahoma Taxable Income
Part 5 - OTHER ADJUSTMENTS TO INCOME
Section 710:50-15-49 - Deduction for retirement income

(a) General provisions applicable to Oklahoma or federal government retirement income. Each individual taxpayer may deduct up to Ten Thousand Dollars ($10,000.00) of retirement benefits paid by the State of Oklahoma or by the federal government. This deduction cannot exceed the amount included in the taxpayer's federal adjusted gross income. The total exclusion from all government retirement benefit plans may not exceed Ten Thousand Dollars ($10,000.00)per individual.

(b) Qualifying Oklahoma or federal government retirement income defined. For purposes of this Section, "Oklahoma or federal government retirement income" means retirement income received from the following sources:

(c) Disability income; state and federal government retirees. Disability retirement benefits received by an individual from sources listed in subsection (b) shall qualify for the retirement income deduction, without regard to the recipient's age.

(d) General provisions for other retirement income. Each individual taxpayer may deduct up to Ten Thousand Dollars ($10,000.00) of other retirement benefits received and included in federal adjusted gross income. This deduction cannot exceed the amount included in the taxpayer's federal adjusted gross income. The total exclusion from all retirement benefit plans may not exceed Ten Thousand Dollars ($10,000.00) per individual.

(e) "Qualifying other retirement income" defined. For purposes of this Section "other retirement income" must be received from the following and satisfy the requirements of the Internal Revenue Code (IRC):

(f) Disability income; private sector retirees. Disability retirement benefits received by an individual shall qualify for the retirement income deduction, without regard to the recipient's age.

(g) Special rule for certain retirement income from a component of the Armed Forces of the United States. Effective for tax year 2006, the deduction for retirement income from any component of the Armed Forces of the United States is the greater of Ten Thousand Dollars ($10,000.00) or fifty percent (50%) of the amount included in the taxpayer's federal adjusted gross income. Effective for tax year 2007 and subsequent tax years, the deduction for retirement income from any component of the Armed Forces of the United States is the greater of Ten Thousand Dollars ($10,000.00) or seventy-five percent (75%) of the amount included in the taxpayer's federal adjusted gross income. For tax year 2022 and subsequent tax years, retirement benefits received by an individual from any component of the Armed Forces of the United States shall be exempt from taxable income.

(h) Special rule for Federal civil service retirement income. Beginning with tax year 2011, retirement benefits received by federal civil service retirees, including survivor annuities paid in lieu of Social Security benefits, are allowed to be excluded from Oklahoma taxable income to the extent such benefits are included in the taxpayer's federal adjusted gross income, pursuant to the provisions of Section 86 of the Internal Revenue Code.