How much does Virginia tax military retirement? This is a common question among military retirees who are considering moving to the state of Virginia. Understanding the tax implications of military retirement income is crucial for making informed decisions about your financial future.
Retirement income from the military is generally tax-free at the federal level. However, state tax laws can vary significantly, and Virginia is no exception. In Virginia, military retirement income is taxed differently depending on the type of income and the retiree’s filing status.
Virginia’s Military Retirement Tax Exemption
Under Virginia’s tax code, military retirement income is exempt from state income tax. This means that if you are a military retiree living in Virginia, you do not have to pay state income tax on your military retirement pay. This exemption applies to all forms of military retirement income, including basic pay, retirement pay, and Survivor Benefit Plan (SBP) payments.
However, it’s important to note that this exemption does not apply to other types of income, such as Social Security benefits, which are taxed in Virginia. Additionally, if you are a member of the Virginia National Guard or the Virginia State Defense Force, your state income tax may be affected by your military service.
Other Tax Considerations for Military Retirees in Virginia
While military retirement income is exempt from state income tax, there are other tax considerations for military retirees in Virginia:
1. Property Taxes: Virginia has a flat property tax rate, which can vary by county. Military retirees may be eligible for property tax relief programs, such as the veterans’ property tax exemption.
2. Vehicle Taxes: Virginia levies a vehicle personal property tax on vehicles registered in the state. Military retirees may be eligible for a discount on this tax.
3. Income Tax on Other Sources: If you have other sources of income, such as rental income or investment income, these may be subject to Virginia state income tax.
Conclusion
In conclusion, Virginia does not tax military retirement income. This makes it an attractive state for military retirees looking to reduce their tax burden. However, it’s important to consider other tax implications and potential tax relief programs available to military retirees in Virginia. Consulting with a tax professional or a financial advisor can help you navigate the complexities of military retirement taxes and ensure you are taking full advantage of the benefits available to you.
