Bill > SB865

This bill modifies Virginia's income tax law by eliminating the current $40,000 cap on military benefits that can be subtracted from taxable income for tax years beginning on or after January 1, 2026. Currently, the law allows incremental increases in the amount of military benefits that can be subtracted from taxable income: $10,000 for 2022-2023, $20,000 for 2023-2024, $30,000 for 2024-2025, and $40,000 for 2025-2026. After 2026, under this bill, taxpayers would be able to subtract the entire amount of their military benefits from their taxable income, with no dollar limit. The bill defines "military benefits" broadly, including military retirement income, qualified military benefits, Survivor Benefit Plan payments, and other military-related payments. This change aims to provide more comprehensive tax relief for military personnel and veterans by allowing them to exclude a greater portion of their military-related income from state taxation.