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

[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:

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

Thank you for your service.

[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.

[grubbsd]

My husband and I are both retired and receiving a military retirement and over the age of 55.  Is it $10,000 per military member or total of $10,000?

[JulieS]

Yes, it is $10,000 per military member, so if you both qualify and file jointly, it will be $20,000. You can follow the instructions in Ernie's post to claim this subtraction. 

[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.   

[lan3w3st]

The turbo instructions state that individuals over 55, including surviving spouses, receiving military retirement income, are eligible for the Military Benefits Subtraction ("MBS").  Is a former spouse of a living military retiree also eligible for the MBS?  Assume each person's pension is over $10,000.

[AmyC]

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

[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.

[bowenrf]

How do you do this? Where am I looking in turbotax program? Why doesn't it have a prompt like most situations?

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

To claim your Military Benefits Subtraction:

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

[ReeseG2]

Thanks.  I have already submitted my taxes, so I need to amend the state return.  I can't figure out how to do that without going through the entire federal return process.  Is there another way?

[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.

[DoninGA]

@kivlint Reported to TurboTax for correction on that website you posted.

Georgia has also changed their tax code for military retirement income.

For Virginia -

Virginia Taxable Income Subtraction for Military Retired Pay: Virginia has a graduated income subtraction for military retired pay. For the 2022 tax year resident Veterans aged 55 and over who are receiving military retired pay can deduct $10,000 from their Virginia taxable income. This subtraction will increase each year by $10,000 until the 2025 tax year, for a maximum subtraction of $40,000.

• 2022 - $10,000
• 2023 - $20,000
• 2024 - $30,000
• 2025 - $40,000