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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, employment 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 their 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).