Bill > HB2700

This bill modifies Virginia's tax code to remove the current cap on military benefits that can be subtracted from taxable income for tax years beginning on or after January 1, 2026. Previously, there were graduated limits on military benefits subtraction: $10,000 for 2022-2023, $20,000 for 2023-2024, $30,000 for 2024-2025, and $40,000 for 2025-2026. Starting in 2026, taxpayers will be able to subtract their total military benefits from their taxable income. Military benefits are defined comprehensively, including military retirement income, qualified military benefits, Survivor Benefit Plan payments, and other military-related benefits paid to veterans or their surviving spouses. This change will provide greater tax relief for military personnel and veterans by allowing them to exclude a larger portion of their military-related income from state taxation, potentially reducing their overall tax burden and providing additional financial support to those who have served in the armed forces.

Budget and Finance

https://lis.virginia.gov/bill-details/20251/HB2700