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HB 137

Income tax, state; increases current cap of military benefits that may be subtracted.

2026 Regular Session Introduced by Nadarius Clark and 2 co-sponsors

HB 137 raises Virginia's income tax deduction cap for military benefits, providing greater tax relief to service members and veterans pending appropriations review.

Left in Committee Communications, Technology and Innovation
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Bill Summary · HB 137

Legislative bill overview

HB 137 increases the current cap on military benefits that Virginia residents can subtract from their state income tax liability. The bill passed the Finance Committee with unanimous approval (18-0) but is currently pending review in the Appropriations Committee. This measure aims to provide greater tax relief for military personnel and veterans.

Why is this important

Military members and veterans often receive various forms of compensation (housing allowances, separation pay, survivor benefits) that are currently subject to Virginia income tax up to a certain limit. Raising this cap would reduce the state tax burden on these populations, potentially improving financial security for service members and their families. However, this also reduces state tax revenue that would need to be offset through other means or budget adjustments.

Potential points of contention

  • Revenue impact: Increasing tax exemptions reduces state revenue; legislators must determine if this is offset elsewhere or if the state can absorb the cost
  • Scope definition: Unclear which military benefits qualify or what the new cap level will be, which could affect how broadly or narrowly the relief applies
  • Equity concerns: Some may argue that broad tax relief for military benefits should be weighed against tax relief for other public servants (teachers, first responders) or low-income Virginians

Compiled from official sources — confirm details with the bill’s official record.

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