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Bill

SB 943

Income tax, state; subtraction for retirement income of certain federal employees.

2025 Regular Session Introduced by Christie Craig and 1 co-sponsor

Virginia bill creates income tax subtraction for retirement income of specified federal employees, reducing their state tax liability.

Passed by indefinitely in Finance and Appropriations (14-Y 0-N)
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WeVote Research Nonpartisan
Bill Summary · SB 943

Legislative bill overview

SB 943 would allow certain federal employees in Virginia to exclude a portion of their retirement income from state income taxation. The bill creates a tax subtraction for qualifying federal retirees, reducing their taxable income in Virginia. This measure appears targeted at federal employees who have separated from service and are receiving retirement benefits.

Why is this important

Federal employees represent a significant workforce in Virginia, particularly in Northern Virginia near Washington, D.C. Tax policy affecting this population influences both state revenue and the state's competitiveness in retaining skilled federal workers. The provision could affect Virginia's tax base and may influence where federal retirees choose to live after leaving service.

Potential points of contention

  • Revenue impact: The bill reduces state income tax revenue by allowing federal retirees to subtract retirement income; the fiscal impact statement would clarify the estimated cost to the state
  • Equity concerns: Creating preferential tax treatment for federal employees' retirement income while other retirees (military, private sector) may not receive equivalent treatment raises fairness questions
  • Definition scope: The specificity of "certain federal employees" requires clear definition to avoid ambiguity about which retirees qualify and potential disputes over eligibility

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

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