VA Disability Pay Tax Exemption

Mississippi taxes a resident's total gross income from all sources, and taxes nonresidents/part-year residents on income from Mississippi sources. A return is required when gross income exceeds the allowable deductions and exemptions for your filing status. The Veterans' Administration payments exclusion applies based on the type of income received.

Mississippi does not tax benefits received from Veterans' Administration payments. Any portion of such income that may be taxed under federal law is not subject to Mississippi's income tax. The official source states no dollar cap, percentage limit, deadline, or duration on this exclusion. Separately, retirement income, pensions, and annuities are generally not subject to Mississippi income tax if the recipient has met the retirement plan requirements; early distributions are not considered retirement income and may be subject to tax.