Virginia tax law changed in 2022 to allow a $10,000 deduction of military retired benefits on Line 7 of form VA760CG. I am the "Taxpayer" in TurboTax and my spouse is the "Spouse". I entered my 1099-R information from the Defense Finance and Accounting Service with my name and SSN. The entry in Form VA760CG looks correct, but it does not differentiate between Taxpayer and Spouse. However, when one dives down into the "Worksheet for Spouse Tax Adjustment and Virginia Taxable Income Allocation", TurboTax has erroneously placed that $10,000 deduction in the "Spouse" column. Further, in the Virginia "Other Subtraction Statement", TurboTax has placed my Total Qualifying Military Benefits Received amount and the $10,000 Code 60 Military Benefits Subtraction in the "Spouse" column. Oddly, unlike the other Virginia forms and worksheets, the "Taxpayer" and "Spouse" columns are swapped in the Virginia "Other Subtraction Statement", with the "Spouse" column on the left and the "Taxpayer" column on the right.
