AM I OBLIGATED TO CLAIM THE MILITARY BASIC PAY SUBTRACTION FROM VIRGINA?.

[feliciano2019]

I WANT TO KNOW THIS BECAUSE I KNOW THAT IF I CLAIM THE MILITARY BASIC PAY SUBTRACTION IT WILL DISQUALIFY ME FOR THE EARN INCOME CREDIT

[DanielV01 · Accepted solution]

Claiming the subtraction on your Virginia return does not eliminate Earned Income Credit on the Federal return.  Virginia would limit your low income credit, which is not the same thing as the Earned Income Credit.  The Virginia Low Income Credit reduces your tax up to having $0 Virginia tax, but also depends on having income below the chart at the following link:  https://tax.virginia.gov/low-income-individuals-credit

Unlike the Federal Earned Income Credit, the low income credit is not refundable, which means it is likely that if you qualify for the Base Military Pay deduction, you will get more value than if you claim the Low Income Credit, or you may not even qualify to claim the Low Income Credit.

[feliciano2019]

Thanks. I  do qualify for low income credit and it will give me a higher refund than Base Military Pay deduction. Can I just not claim the military base pay deduction even though I qualify for it?

[feliciano2019]

Can I choose not to claim the military base pay deduction so that I can claim the low income credit from Virginia?

[DanielV01]

What I think you can do is state that you were not outside of the state for 90 days, so that the system can use the credit.