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SB 148

Income tax, state; subtraction for tax, military retirement benefits, uniformed services.

2026 Regular Session Introduced by Jeremy McPike

SB 148 exempts Virginia military retirement benefits from state income tax, reducing tax burden on military retirees at an undetermined cost to state revenue.

Continued to next session in Finance and Appropriations (12-Y 1-N)
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Bill Summary · SB 148

Legislative bill overview

SB 148 would allow Virginia military retirees and uniformed service members to exclude their military retirement benefits from state income tax calculations. This creates a tax subtraction (deduction) specifically for qualifying military pension income, similar to tax treatments some states offer to attract and retain military personnel.

Why is this important

Military retirement benefits are a significant portion of income for many Virginia veterans and active duty personnel. Tax exemptions on military pensions can influence where service members choose to retire and whether they remain in Virginia, potentially affecting the state's ability to retain experienced military talent and support military-connected communities.

Potential points of contention

  • Revenue impact: Reducing taxable income decreases state tax collections; the fiscal impact statement suggests measurable but undetermined revenue loss that would need to be addressed through other means
  • Fairness and scope: Questions about whether this benefit should apply only to military retirees or extend to other public service retirees (police, firefighters, teachers), and whether partial vs. full exclusion is appropriate
  • Implementation complexity: Determining eligibility, verifying military service status, and distinguishing between different types of military compensation (pensions, disability, survivor benefits) could create administrative burden

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

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