Military Retirement Pay Income Tax Subtraction
Subtract up to $40,000 of military retirement income from Virginia taxable income.
State BenefitVirginiaTax Benefits
Verified September 30, 2026 against tax.virginia.gov
At a glance
- Benefit type
- Tax Benefits — Virginia
- Who it's for
- Veterans
- VA rating needed
- No rating requirement
- Estimated value
- Up to $2,300/yr tax savings
- Where it applies
- Virginia
- Last verified
- September 30, 2026
What is Military Retirement Pay Income Tax Subtraction?
Military Retirement Pay Income Tax Subtraction is a Virginia tax benefits benefit for veterans. Subtract up to $40,000 of military retirement income from Virginia taxable income. The listed value is Up to $2,300/yr tax savings.
Who qualifies
- Veterans
- Available to any veteran
- Virginia residency
Who is eligible
Eligibility
Any military retiree receiving retirement income from the U.S. Armed Forces. No age requirement (as of tax year 2024). Virginia resident filing state taxes. TSP distributions do NOT qualify; only direct military retired pay.
What Military Retirement Pay Income Tax Subtraction covers
Covers
Subtract up to $40,000 for tax year 2025 and later. At Virginia's top marginal rate of 5.75%, this is worth up to $2,300 in annual tax savings.
How to apply for Military Retirement Pay Income Tax Subtraction
How to apply
Claimed on Virginia state income tax return.
Verified information & sources
- Last verified
- September 30, 2026
- Official source
- tax.virginia.gov
Compiled and fact-checked against the official source linked above. Benefit rules and dollar amounts change over time — always confirm current details at the official source before applying. A county Veterans Service Officer (VSO) is a free, accredited advocate who can review your eligibility and help you file at no cost.
How VetUnlock verifies benefitsFrequently asked questions about Military Retirement Pay Income Tax Subtraction
Who qualifies for Military Retirement Pay Income Tax Subtraction?
Military Retirement Pay Income Tax Subtraction is for Veterans; available to any veteran; virginia residency. See the eligibility details on this page and confirm with the official source before applying.
How much is Military Retirement Pay Income Tax Subtraction worth?
The listed value is Up to $2,300/yr tax savings. Amounts can change — confirm the current figure at the official source linked on this page.
How do I apply for Military Retirement Pay Income Tax Subtraction?
Apply through the official source linked on this page. A county Veterans Service Officer (VSO) can review your eligibility and help you file at no cost.
Where can I verify Military Retirement Pay Income Tax Subtraction?
Benefit rules and dollar amounts change, so always confirm current details at the official source linked on this page. A free, accredited county or state Veterans Service Officer (VSO) can also verify your eligibility and help you apply.
Other Virginia Tax Benefits
- Survivor Benefit Plan (SBP) Income Tax SubtractionUp to $2,300/yr tax savingsSubtract up to $40,000 of SBP annuity income from Virginia taxable income.
- Medal of Honor Recipient Full Income Tax ExemptionFull exemption of military retirement incomeComplete exemption of all military retirement income from Virginia state income tax for Medal of Honor recipients.
- VA Disability Compensation State Tax ExemptionVaries (full federal/state exclusion of VA comp/pension/DIC)VA disability payments, pension payments, and survivors benefits are fully excluded from Virginia taxable income.
- Surviving Spouse Property Tax Exemption (Died in Line of Duty)$1,000-$10,000+/yr depending on localityFull real property tax exemption for unremarried surviving spouses of service members who died in the line of duty.