Yes. TurboTax is set up to handle the new Virginia military benefits subtraction. For taxable years beginning on and after January 1, 2022, certain military benefits received by an individual age 55 or older may be subtracted from Virginia taxable income. The maximum amount of the subtraction is $10,000 in Taxable Year 2022. To claim your Military Benefits Subtraction: Tap State Taxes in the left column Tap Your State Returns On “Status of your state returns,” tap Continue next to Virginia Keep going until you see “Here’s the income that Virginia handles differently” In Military, select Military Benefits Subtraction On Enter Your Military Benefits, enter the Total Qualifying Military Benefits Received up to $10,000 Thank you for your service.

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jcpoates1

Question

Does Turbo Tax account for the Virginia Military Retirement Income change for 2022? It is reduced on first $10,000 for retirees over 55.

Forum|Forum|3 years ago
January 30, 2023
8 replies
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TurboTax Online

ErnieS0

Yes. TurboTax is set up to handle the new Virginia military benefits subtraction.

For taxable years beginning on and after January 1, 2022, certain military benefits received by an individual age 55 or older may be subtracted from Virginia taxable income.

The maximum amount of the subtraction is $10,000 in Taxable Year 2022.

To claim your Military Benefits Subtraction:

Tap State Taxes in the left column
Tap Your State Returns
On “Status of your state returns,” tap Continue next to Virginia
Keep going until you see “Here’s the income that Virginia handles differently”
In Military, select Military Benefits Subtraction
On Enter Your Military Benefits, enter the Total Qualifying Military Benefits Received up to $10,000

Thank you for your service.

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RichN

There is a new Tax Law in Virginia effective for your2022 income which provides up to a $10k deduction on Virginia income if you are 55 or older and receive retired military pay. You MUST enter this data proactively. TurboTax does NOT ask this obvious question but should. There is NO prompt from TurboTax as of today (2/19/2023) for this Virginia deduction. Perhaps, it will be included in a future update and hopefully added for next year! Follow the above instructions to get the deduction.

kivlint

In addition, this is what you get from the experts when you google the subject:

https://turbotax.intuit.com/tax-tips/military/states-that-dont-tax-military-retirement/L6oKaePdA

'Seven states tax military retirement pay fully and offer little to no tax benefits for retirement income: California, Georgia, Montana, Rhode Island, Utah, Vermont, and Virginia.'

This is not accurate and my 2022 Virginia return (using TurboTax) did not account for the change in the law.

Gonzo-USN

Yes. Follow Ernie's instructions. TurboTax is set up to handle the new Virginia Military Benefits Subtraction

Key is to look for Military Benefits deduction.

CHad Nixon

I cannot find the old Virginia Deduction for Military Basic Pay. :

Deduction for Military Basic Pay

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. For every $1.00 of income over $15,000, the maximum subtraction is reduced by $1.00. 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.

for UNDER 55, where is it? It was there last year

DMarkM1

It appears you may be mixing two different deductions. The VA deduction for "Active Duty Military Pay" is still in the VA state interview for up to $15,000 of active duty pay for VA residents if they served on active duty 90 days or more. The interview question asking if the taxpayer served over 90 days on active duty appears in the VA state interview after entering a military W2 in the federal interview and indicating on the follow on page "Uncommon Situations" that the W2 is "Active Duty Military Pay." The deduction as described is reduced $1 for every $1 over $15,000 of active duty pay.

There is no VA deduction for "Military Retirement Pay" received by taxpayers under age 55.

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AmyC

Employee

Former spouse is not listed unless you have a special situation related to the Internal Revenue Code. VA subtractions gives these rules:

Military Retirement

Beginning with your 2022 Virginia income tax return (returns filed in 2023), you can claim a subtraction for certain military benefits if you’re 55 or older. These include:

military retirement income received for service in the Armed Forces of the United States,
qualified military benefits received pursuant to a section of the Internal Revenue Code regarding certain military benefits,
benefits paid to the surviving spouse of a veteran of the Armed Forces of the United States under the Survivor Benefit Plan program established by the U.S. Department of Defense, and
military benefits paid to the surviving spouse of a veteran of the Armed Forces of the United States.

If you claim this subtraction, you can’t claim another subtraction, deduction, credit, or exemption for the same income.

@Ian3w3st

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dnrcald3

Thanks very much for providing this information. I already e filed and am eligible for this deduction and didn't know you had to go through this procedure to receive this $10,000 deduction. This should automatically be captured in the program. I wonder how many military retirees now are over paying Virginia taxes? Probably thousands. Turbo Tax needs to fix this glitch.

gtmohawkjr

Does Virginia tax military retirement pay and if so by how much?

gtmohawkjr

My military retired home of record is Texas but I got a new job in Virginia. How is my military retirement taxed?

gtmohawkjr

pbafire

And for 2024 tax year (taxes filed in 2025)Turbo Tax still has it wrong for Virginia. They still have the age limit but it has been lifted.

How old do I have to be to claim the Military Benefits Subtraction?

You must be 55 or older. Beginning with taxable year 2024 (returns usually filed in 2025,) you can subtract these benefits regardless of your age

b. For taxable years beginning on and after January 1, 2022, but before January 1, 2023, up to $10,000 of military benefits; and for taxable years beginning on and after January 1, 2023, but before January 1, 2024, up to $20,000 of military benefits.

c. For taxable years beginning on and after January 1, 2024, but before January 1, 2025, up to $30,000 of military benefits; and for taxable years beginning on and after January 1, 2025, up to $40,000 of military benefits.

The subtraction allowed by subdivision b shall be allowed only for military benefits received by an individual age 55 or older.
The subtraction allowed by subdivision c shall be allowed for military benefits received by an individual of any age.

DMarkM1

Thank you for reporting your experience. We are currently investigating the issue and will provide updates as soon as possible.

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RichN

So, 7 months have gone by and most of will be starting their 2024 tax computations. Does ANYONE know if this change has finally been integrated into the TurboTax software? It would REALLY be nice to have it this year as many of us missed or almost missed this SIGNIFICANT Virginia tax change. (If not, come on Turbo Tax! One of the main reasons that I PAY for your product is that I expect it to be accurate. This matter was surfaced last year and your response was that you were looking into it. Seems like enough time has passed already to make this change. Hope to hear SOON that you have already made this IMPORTANT change to your software.)

RichN

Turbotax does NOT DO THIS AUTOMATICALLY. I completed my federal taxes and then it showed Virginia as my home state and on the bottom it said finished with states. If you click this thinking that Turbotax has already completed your Virginia tax forms without your intervention you will MISS THE ENTIRE VIRGINIA MILITARY RETIREMENT DEDUCTION! I thought it was asking if there were any OTHER states that I needed.
You have to ENTER the Virginia tax section at that point and complete the section on military retired pay exemptions. If you do what I almost did you will lose a SIGNIFICANT Virginia tax deduction. In my case it was over $1700!

Please be very careful with this section! Turbotax has rightly claimed they have included the new military retirement exemption BUT it does NOT do it automatically!
When I finished my federal taxes, the next page for the state tax gives the wrong impression that they have already included the Virginia military retirement income deduction but it does NOT!

When I read that they had “fixed” the problem I was pleased. Unfortunately, it STILL needs work because the first page you come to after your federal taxes is completed, left me with the impression it was done. I went through the turbotax final check and it did not show up as an error or that they needed more information. Fortunately, I was sensitive to the possibility of an error and went back and waded through each of the questions for my Virginia tax. You have to consciously remember to go through your state section or you will miss the deductions!

pbafire

they did fix the problem. it used to error if you were under age 55 (va ammended it to all ages for this year forward). that was the original problem w TTax. And yes - you still have to 'work through' the sections on the state tax tab, and click the areas you'd wish to work/review. It is now 'working as designed' but no it is not 100% foolproof with some flipping through each screen.

RichN

Given the newness and significant benefit, it would really be great if there was a prompt for Virginia tax payers asking if any of your income is military.