Active-duty pay
Partially Exempt
Up to $15,000 of military basic pay subtracted for service members earning less than $30,000 annually. Phases out entirely above $30K.
State Guide · VA
Virginia — Military Tax Treatment
Virginia's retirement subtraction reached its full $40K cap in 2025. The active duty/Guard subtraction is modest and income-limited ($15K for those earning under $30K). Senior NCOs and officers exceed the income threshold — the subtraction phases out entirely.
2026 update
VA retirement subtraction is now $40K — phase-in complete.
Tax treatment at a glance
Guard & Reserve drill pay
Partially Exempt
Virginia's military pay subtraction (up to $15,000) applies to Guard and Reserve pay as well as active duty, for members earning under $30,000 annually. Most NCOs and all officers will exceed the income threshold and not qualify.
Military retirement pay
Partially Exempt
Up to $40,000 of military retirement subtraction (phase-in complete as of 2025).
The numbers · verified for tax year 2025
Top marginal rate
5.75%
Retirement-pay exemption
Up to $40,000
For tax year 2025, a military retiree may subtract up to $40,000 of eligible military retirement pay at any age — the final step of a phase-in ($10k/2022 → $40k/2025+). The former age-55 requirement was removed beginning with tax year 2024. Applies to military retirement and SBP only, not TSP or civilian income.
Standard deduction
For 2025 the standard deduction is $8,750 single / $17,500 married filing jointly.
VA disability compensation
Always tax-free
Federally tax-free under 38 USC § 5301. No state taxes VA disability compensation as income — Virginia included.
Survivor Benefit Plan (SBP)
Follows retirement
SBP annuities likely fall within the $40K retirement subtraction — verify with Virginia Tax.
Federal rules that override state law
SCRA — Servicemembers Civil Relief Act
Active-duty servicemembers pay state income tax only to their state of legal domicile — not the state where they are stationed. If you are from Texas and stationed in Virginia, Virginia cannot tax your military pay. This applies during all active duty periods and during Guard/Reserve mobilizations on federal (Title 10) orders.
MSRRA — Military Spouses Residency Relief Act
Military spouses can maintain their home-state domicile even when living in a different state due to their servicemember's orders. A spouse who is a Texas resident following their servicemember to Virginia can keep Texas as their tax domicile and avoid Virginia state income tax on their wages.
Guard & Reserve — the SCRA gap
SCRA pay protections apply during federal (Title 10) activation orders. During routine drill weekends and state-only activations, Guard and Reserve members are state residents serving in their home state — SCRA does not protect their drill pay from state income tax. Whether Virginia exempts that pay is the state-specific question answered above.
Filing watch-outs
- 01VA Schedule ADJ for military pay subtractions — both retirement and active duty/Guard subtractions are reported here
- 02The $15K active duty subtraction phases out entirely above $30K income — verify your eligibility
- 03Retirement subtraction: $40K cap is per return — review if filing jointly
Veteran-specific tax benefits
Disabled veteran property tax exemption.
Official authority
https://www.tax.virginia.gov/ ↗State tax law changes annually. Verify current rules with the Virginia Department of Revenue before making any tax decision.
Virginia military tax — common questions
Does Virginia tax military retirement pay in 2026?
Virginia partially taxes military retirement pay. Up to $40,000 of military retirement subtraction (phase-in complete as of 2025).
Does Virginia tax active-duty military pay?
Virginia partially taxes active-duty military pay for state residents. Up to $15,000 of military basic pay subtracted for service members earning less than $30,000 annually. Phases out entirely above $30K. Under the SCRA, Virginia can only tax the military pay of service members who are legally domiciled in Virginia — not those merely stationed there.
Does Virginia tax National Guard and Reserve drill pay?
Virginia partially taxes Guard and Reserve drill pay. Virginia's military pay subtraction (up to $15,000) applies to Guard and Reserve pay as well as active duty, for members earning under $30,000 annually. Most NCOs and all officers will exceed the income threshold and not qualify.
Is VA disability compensation taxed in Virginia?
No. VA disability compensation is federally tax-free under 38 U.S.C. § 5301, and no state — including Virginia — taxes it as income.
If I'm stationed in Virginia but claim another state, can Virginia tax my military pay?
No. Under the Servicemembers Civil Relief Act (SCRA), active-duty pay is taxable only by your state of legal domicile, not the state where you are stationed. If your domicile is elsewhere, Virginia cannot tax your active-duty military pay. Military spouses get the same protection under the MSRRA.
What changed for military taxes in Virginia for 2026?
VA retirement subtraction is now $40K — phase-in complete.
Related tools
Other state guides