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Category: Virginia

Virginia Military Filing Information

Residents:

Members of the armed forces on active duty are taxed on their military pay only by their legal states of residence (home of record). If your legal state of residence was Virginia when you entered the armed forces, and you have not legally changed your residency to another state, you are still a Virginia resident, although you may be stationed elsewhere. Report all of your income on your Virginia return, Form 760, whether it was received from within or outside of Virginia.

 Military Pay Deduction-

Military personnel stationed inside or outside Virginia may be eligible to subtract up to $15,000 of military basic pay received during the taxable year, provided they are on extended active duty for more than 90 days (includes National Guard). For every $1.00 of income over $15,000, the maximum subtraction is reduced by $1.00.  If your basic military pay is $30,000 or more, you are not entitled to a subtraction.

For example, if your basic pay is $16,000, you are entitled to deduct only $14,000. You are not eligible for the subtraction if your military basic pay is $30,000 or more.

 

** To enter the subtraction from within your TaxSlayer account, choose 

State Section >> Enter Myself >> Subtractions from Income >> Other Subtractions >> Basic Military Pay.

 

* Combat Pay Deduction-

Military personnel on active duty service in a combat zone or a qualified hazardous duty area may subtract their combat or hazardous duty pay, to the extent that the pay was included in federal adjusted gross income and not otherwise subtracted, deducted or exempted.

       Note:  Combat pay reported as "Code Q" wages on Form W-2 is excluded from federal adjusted gross                    income and may not be subtracted on the Virginia return.

**To enter the subtraction from within your TaxSlayer account, choose 

State Section>>Enter Myself>>Subtractions from Income>>Other Subtractions> Military Pay Attributable to Active Duty in Combat Zone.

 

Nonresidents:

Members of the armed forces who are not Virginia residents are not subject to Virginia income tax on their military pay, or on interest received from accounts held in Virginia banks. However, if you have other income from Virginia sources, such as a part-time job, or a business or trade conducted in Virginia, you are subject to tax on this income.  You should report the income on a nonresident return, Form 763.

If Virginia withholdings were taken from your nonresident military pay in error, go to the Federal Section >> Income >> Wages and Salaries >> Edit your military W-2 >> remove the amount listed in box 16.

 

Exemption for Virginia National Guard Income:

 The wages or salaries received by any person for active and inactive service in the National Guard of the Commonwealth of Virginia, not to exceed the amount of income derived from thirty-nine calendar days of such service or $3,000, whichever amount is less, is exempt from taxes.  However, only those persons in the ranks of 03 (Captain) and below shall be entitled to the deductions specified herein.  

Note: This subtraction does not apply to members of the active or reserve units of the Army, Navy, Air Force or Marines, or the National Guard of other states or the District of Columbia. If you claim this subtraction, you cannot claim a Credit for Low-Income Individuals or Virginia Earned Income Credit.

 

If a National Guard service member has been in an active duty status for 90 consecutive days or more during the taxable year, they may also qualify for the exemption for the first $15,000 of basic military pay. However, if a National Guard service member has been on active duty status for less than 90 consecutive days of the taxable year, they will not qualify for the exemption for the first $15,000 of basic military pay. If their extended active duty status rolls into the following taxable year and lasts for more than 90 consecutive days, they will qualify for the exemption on the following year income tax return, but only for the pay earned in that taxable period.

 

**To enter the subtraction from within your TaxSlayer account, choose State Section >> Enter Myself >> Subtractions from Income >> Other Subtractions >> Virginia National Guard Income.

 

 

Claiming More Than One Subtraction:

 

It is possible to meet qualifications for and claim more than one military subtraction; however, a double exclusion of military income is prohibited for military subtractions.

 

For example, the income used to calculate the $15,000 Military Subtraction could not be used to calculate the National Guard Subtraction and vice versa.

 

 

 

Congressional Medal of Honor Recipients:

 

You are allowed to deduct the amount of military retirement income you received as an individual awarded the Congressional Medal of Honor.

 

 **To enter the subtraction from within your TaxSlayer account, choose State Section >> Enter Myself >> Subtractions from Income >> Other Subtractions >> Medal of Honor Recipients.

 

 

 Military Spouse Residency Relief Act:

Under the Service member Civil Relief Act, as amended by the Military Spouses Residency Relief Act, a spouse of a military service member may be exempt from Virginia income tax on wages if:

(1) the service member is present in Virginia in compliance with military orders

(2) the spouse is present in Virginia solely to be with the service member

(3) they both must maintain the same non-Virginia domicile state.

 

See our Knowledgebase Article here for filing information for the Military Spouse.

See MSRRA frequently asked questions, by clicking here.

 

 For additional information, see

* Military Tax Tips

Instructions for Resident Form 760.

Instructions for NonResident Form 763.

* Visit MyArmyBenefits