VA HB588

Expands the Virginia individual income tax subtraction for military benefits to allow 100% of military benefits to be exempt from state income tax for taxable years beginning on and after January 1, 2026

Continues the phased approach from previous years: $10,000 (2022), $20,000 (2023), $30,000 (2024), $40,000 (2025), and full exemption (2026 and after)

Military benefits covered include military retirement income, qualified military benefits under federal law, Survivor Benefit Plan payments to spouses of veterans, and other military benefits paid to surviving spouses

The subtraction applies to individuals of any age under the expanded provisions, whereas earlier versions required age 55 or older

Amends § 58.1-322.02 of the Code of Virginia, introduced January 14, 2026, by Delegate Ballard