Financial Benefits for Veterans in Virginia

Military Retired Pay Income Tax Subtraction

Virginia allows eligible veterans to subtract up to $40,000 of their military retirement income from Virginia taxable income, reducing state income tax owed on military retired pay. The former age-55+ and income tests were repealed.

Eligibility: Veterans receiving military retired pay may subtract up to $40,000 of that income for tax year 2025 and later, at any age and with no income test.

Estimated value: Subtraction of up to $40,000 of qualifying military retired pay from Virginia taxable income

How to apply: Claim the subtraction on your Virginia individual income tax return; see the Virginia Department of Taxation for current-year amounts and rules.