It appears you would qualify for the subtraction. According to the instructions for the VA Form 760, "This subtraction is allowed for military basic pay that is included in federal adjusted gross income and is not included in another subtraction, such as the Virginia National Guard Income Subtraction.
Remember the subtraction is reduced by $1 for each $1 over 15,000. So if you have 29,000 of military basic pay (box 1) then the subtraction total will be $1000 from income. That is what creates the $30,000 limit.
If the military basic pay does not exceed $15,000, then the entire amount may be subtracted. If the basic military pay is over $15,000, then the subtraction is reduced by the amount exceeding $15,000. For every $1.00 of income over $15,000, the maximum subtraction is reduced by $1.00. If your basic military pay is $30,000 or more, you are not entitled to a subtraction.
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