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Summary of Virginia Military and Veterans Benefits: The Commonwealth of Virginia offers special benefits for its military Service members and Veterans including state tax advantages, education and tuition assistance, vehicle tags, as well as hunting and fishing license privileges. Eligibility for some benefits may depend on residency, military component, and Veteran disability status.
Virginia Military and Veterans State Benefit Highlights and Eligibility
What are my Virginia Military and Veterans State Tax Benefits?
Virginia Income Tax Deduction for Military Pay: Deduction of up to $15,000 of basic pay (does not apply if basic pay income is over $30,000).
Who is eligible for a Virginia Income Tax Deduction for Military Pay? Must be a member of the military (Active, Reserve, or National Guard) stationed inside or outside Virginia, provided they are on extended active duty for more than 90 days. For every $1.00 of income over $15,000, the maximum subtraction is reduced by $1.00. For example, if basic pay is $16,000, the Service member is entitled to deduct only $14,000.
Virginia Tax Exemption for National Guard Income: The wages or salaries received by any person for active and inactive service in the National Guard of the Commonwealth of Virginia, not to exceed the amount of income derived from thirty-nine calendar days of such service or $3,000, whichever amount is less. If a National Guard Service member has been in an active duty status for 90 consecutive days or more during the taxable year, they may also qualify for the exemption for the first $15,000 of basic military pay. However, if a National Guard Service member has been on active duty status for less than 90 consecutive days of the taxable year, they will not qualify for the exemption for the first $15,000 of basic military pay. If their extended active duty status rolls into the following taxable year and lasts for more than 90 consecutive days, they will qualify for the exemption on the following year income tax return, but only for the pay earned in that taxable period.
Who is eligible for a Virginia Tax Exemption for National Guard Income? Must be a member of Virginia Air National Guard, in the rank of Captain (03) or below to be eligible.
Virginia Tax Exemption for Spouses and Dependents of Military Personnel: Spouses and dependents that are present in Virginia solely to be with the Service member Spouse/ parent who is permanently stationed here in compliance with military orders, have the same domicile or legal state of residence, and the income received in Virginia is from wages or salaries earned as an employee, or is derived from certain limited self-employment is exempt from Virginia taxes. You must meet all of these criteria to qualify for relief.
Virginia Tax Subtraction for Combat and Hazardous Duty Pay: Military personnel on active duty service in a combat zone or a qualified hazardous duty area may subtract their combat or hazardous duty pay, to the extent that the pay was included in Federal adjusted gross income and not otherwise subtracted, deducted or exempted. Any military pay allowances earned while serving by order of the President of the United States with the consent of Congress in a combat zone or qualified hazardous duty area treated as a combat zone for federal tax purposes pursuant to Section 112 of the Internal Revenue Code qualify for the subtraction. Note: Combat pay reported as "Code Q" wages on Form W-2 is excluded from federal adjusted gross income and may not be subtracted on the Virginia return.
Virginia Taxes on Retired Military Pay: Military retirement pay is subject to tax as income.
Virginia Income Tax Exemption on Retired Military Pay received by Medal of Honor Recipients: Military retirement income received by those awarded the Medal of Honor can be subtracted from federal gross income for tax purposes. The subtraction does not apply to benefits received by a Surviving Spouse.
Virginia State Taxes on U.S. Department of Veterans Affairs Military Disability Retired Pay: Military Disability Retirement Pay received as a pension, annuity or similar allowance for personal injury or sickness resulting from active service in the Armed Forces should not be included in taxable income if any of the following conditions apply:
You were entitled to receive a disability payment before September 25, 1975;
You were a member of the military (active or reserves) or were under a binding written commitment to become a member on September 24, 1975;
You receive disability payments for a combat-related injury. This is a personal injury or sickness that:
Resulted directly from armed conflict,
Took place while you were engaged in extra-hazardous service,
Took place under conditions simulating, including training exercises such as maneuvers, or
Was caused by an instrumentality of war.
You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it (the exclusion under this condition equals the amount you would be entitled to from the VA).
Combat and Non-Combat Zone Virginia Income Tax Filing and Payment Extensions: Members of the Armed Forces serving in a combat zone will receive either the same individual income tax filing and payment extensions as those granted to them by the IRS, plus an additional fifteen days, OR a one-year extension, whichever date is later. The term "combat zone" includes hazardous duty areas and contingency zones that qualify for similar federal extensions and tax benefits. Service members who claim this extension should write "Combat Zone" at the top of their tax returns and on the filing envelopes.
Effective for taxable year 2008, every member of the armed services deployed to noncombat service outside of the United States is also allowed an extension of his or her due date for filing and payment. The extension will expire 90 days after the completion of deployment. Service members who claim this extension should write "Overseas Noncombat" at the top of their tax returns and on the filing envelopes.
All extensions also apply to Spouses of military personnel.
Virginia State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation: Dependency and Indemnity Compensation (DIC) is a tax-free monetary benefit paid to eligible survivors of military Service members who died in the line of duty or eligible survivors of Veterans whose death resulted from a service-related injury or disease.
Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Colorado State Tax Benefits: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.
Virginia State Tax Benefit on U.S. Department of Veterans Affairs Military Disability Retired Pay (Service Connected): Disability compensation varies with the degree of disability and the number of dependents and is paid monthly. The benefits are not subject to federal or state taxes. The payment of retirement pay, disability severance pay, and separation incentive payments known as SSB and VSI (Special Separation Benefits and Voluntary Separation Incentives) also affects the amount of VA compensation paid.
Who is eligible for Virginia State Tax Benefit on U.S. Department of Veterans Affairs Military Disability Retired Pay (Service Connected)? Disability compensation is a monetary benefit paid to Veterans who are disabled by injury or disease incurred or aggravated during active military service. The service of the Veteran must have been terminated through separation or discharge under conditions that were other than dishonorable.
Virginia State Tax Benefit on U.S. Department of Veterans Affairs Military Disability Retired Pay (Non-Service Connected) : Veterans with low incomes who are permanently and totally disabled may be eligible for monetary support if they have 90 days or more of active military service, at least one day of which was during a period of war. The discharge from active duty must have been under conditions other than dishonorable. The permanent and total disabilities must be for reasons other than the Veteran’s own willful misconduct. Payments are made to qualified Veterans to bring their total income, including retirement and Social Security income, to a level set by Congress. Unreimbursed medical expenses may reduce countable income. Veterans of a period of war who are age 65 or older and meet service and income requirements are also eligible to receive a pension, regardless of current physical condition.
Virginia Real Estate Tax Exemption or 100% Disabled Veterans and Surviving Spouses: Veterans rated by the U.S. Department of Veterans Affairs (VA) as having a 100%, permanent and total, service-connected disability or who have a service-connected individually unemployable disability rating are exempt from paying real estate taxes on their primary residence. The exemption is based on the Veteran's disability rating rather than the level of compensation. The exemption includes property held jointly by a husband and wife and applies to the residence and up to one acre of land. The Surviving Spouse of an eligible Veteran may also receive the real estate tax exemption if the Veteran died on or after January 1, 2011.
Amended through ballot measure Nov 2018: Prior to the Nov 2018 vote this exemption was not extended if the Surviving Spouse moved after the death of the Service member, now this exemption applies to the Surviving Spouse’s principal place of residence without any restriction on the Spouse’s moving to a different principal place of residence.
Virginia National Guard State Tuition Assistance Program (VNGSTAP): The State Tuition Assistance Program offers up to $8,000 per year for tuition and fees toward one credential at each level up to a Ph.D.