Is there a special tax benefit for military retirees?

Yes. If you are a retired member of the military, you may be able to subtract up to $5,000 of your military retirement income from your federal adjusted gross income before determining your Maryland tax for tax year 2007. To qualify, you must have been a member of an active or reserve component of the U.S. armed forces, a member of the Maryland National Guard, or you must have retired from active duty with the commissioned corps of the Public Health Service, the National Oceanic and Atmospheric Administration, or the Coast and Geodetic Survey. For more information, see Military Retirement Income.