Virginia House Bill HB1045

Virginia 2022 Regular Session

• Introduced: 1/12/22
• Refer: 1/12/22

Caption

Income tax, state; subtraction for veteran retirement compensation.

Impact

The enactment of HB 1045 would have a significant impact on the state's tax laws by modifying how veteran retirement compensation is treated for income tax purposes. By providing a substantial subtraction from taxable income, the bill aims to support the financial well-being of senior veterans, recognizing their service and sacrifices. The proposed changes are expected to influence tax revenue, as the state may see a decrease in income tax collected from eligible veterans. Proponents argue that this financial relief is necessary to improve the quality of life for those who have served the country.

Summary

House Bill 1045 seeks to amend the Virginia Code by providing specific subtractions from state taxable income for veteran retirement compensation. The bill proposes to gradually increase the allowable subtraction amount for veterans aged 65 and older over a series of tax years, ultimately allowing for a reduction of up to $40,000 of their annual retirement compensation by the year 2025. This initiative aims to alleviate the financial burden on elderly veterans and encourage a tax-friendly environment for those who have served in the Armed Forces.

Contention

Though the bill is generally viewed positively among veterans' advocacy groups and supporters in the legislature, there may be contention regarding the potential loss in tax revenue for the state. Critics argue that while supporting veterans is important, the state must consider the overall fiscal impact of such tax incentives. Questions may arise about how these changes fit into the broader scope of tax reform and funding for necessary public services. There will likely be discussions about balancing the needs of veterans with the fiscal responsibilities of the state government.