PolitiFact VA: Virginia is among the few states that tax veterans’ pensions

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Speaker: Governor Glenn Youngkin
Statement: “We’re one of only a handful of states that actually tax the retirement of our veterans.”
Date: February 17th
Attitude: rally

Governor Glenn Youngkin recently visited the Leesburg Diner in Loudoun County to rally public support for a series of tax cuts pending in the General Assembly.

One item on his agenda is cutting state income taxes on military pensions.

“We’re one of only a handful of states that actually taxes the retirement of our veterans,” Youngkin, a Republican, told the crowd Feb. 17.

Youngkin’s press secretary, Macaulay Porter, told us the governor’s information came from Military Benefits, a privately operated website that specializes in what its name suggests. We found almost identical information on another private site called The Military Wallet.

According to the websites, Virginia is among the three states that tax military pensions in full. It connects California and Vermont. Another 12 states tax pension payments, but at a reduced level.

In all, 15 states, including Virginia, tax military pensions in some way. That’s certainly more than the imprecise “handful” Youngkin claims.

Nine states have no income tax, while 26 exempt military pensions entirely.

Virginia Legislature

The House and Senate unanimously passed bills in February that would reduce, but not end, the state income tax on veterans’ pensions. Since the bills are different, the chambers have to work out a compromise.

The House bill follows Youngkin’s proposal to protect pensions of up to $40,000 a year from taxation. The plan would be phased in over three years, with $20,000 protected this year and $30,000 the next year.

When fully implemented in 2024, the plan would save military veterans up to $2,500 per year, depending on their other income. It would cost the state about $250 million a year.

The Senate bill is less generous. It would be limited to military retirees who are at least 60 years old and would protect up to $20,000 from income taxes – half that of the House of Representatives. The plan would be phased in over four years.

Fully implemented in 2025, it would save military retirees up to $1,250 per year, depending on their other income. It would cost the state $122 million a year.

Our verdict

Youngkin garbled facts when he said, “We are one of only a handful of states that actually tax the retirement of our veterans.”

Virginia is one of three states that fully tax military pensions. Twelve other states tax pensions at reduced rates, which Youngkin wants in Virginia.

A total of 15 states tax military pensions. That’s a minority, but certainly more than the “handful” described by Youngkin.

We rate Youngkin’s statement as half true.

swell
Glenn Youngkin, Comments at Leesburg Diner, February 17, 2022 (Mark 6:05)
Email from Macaulay Porter, Youngkin Press Secretary, February 21, 2022
Military Benefits, “States That Don’t Tax Military Retirement Pay,” accessed February 22, 2022
The Military Wallet, “Military Retirement Income Taxes by State – Which States Don’t Tax Military Retirement Pay?” February 3, 2022
Legislative Information System, SB528, HB1128, Session 2022
Virginia Department of Taxation, Fiscal Impact Statements for SB528, HB1128
Virginia Department of Taxation, Tax Chart accessed February 22, 2022

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