Virginia State: Subtraction for Federal and State Employees

[wiled]

Can you claim subject subtraction if you receive a pension but worked for the VA retirement system and earned less than $15,000.00

[JohnW152]

You may be confusing two different tax issues.

If you're a current federal or state employee who earns $15,000 or less in annual salary from all employment, you're allowed to subtract up to $15,000 of your salary from that state or federal job.  See 39, Federal and State Employees in the 2023 Form 760 Resident Individual Income Tax Instructions. 

If you're eligible for this subtraction, you can receive it whether you're drawing a pension or not.

That said, you may be asking if you can claim a subtraction on a pension based on a federal or state job where you earned $15,000 or less.  The answer to that is no. 

However, if you or your spouse were born on or before January 1, 1959, you might qualify to claim an age deduction of up to $12,000 each for 2023.  See Taxpayers Age 65 and Older in the instructions linked above.

If this doesn't address your issue, feel free to post back.