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Warren Fiske
By Warren Fiske February 23, 2022

Contrary to Youngkin, more than a 'handful' of states tax military pensions

If Your Time is short

  • Virginia is among three states that fully tax military pensions.
  • Another 12 tax the pensions at reduced rates.
  • All told, miltary pensions are subject to some form of income tax in 15 states.  

Gov. 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 are one of only a handful of states that actually taxes our veterans’ retirement," Youngkin, a Republican, told the crowd on Feb. 17. 

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

Virginia is among three states that fully tax military pensions, according to the web sites. It joins California and Vermont. Another 12 states tax the retirement pay, but at reduced levels.

All told, 15 states including Virginia tax military pensions in some way. That’s certainly  more than the imprecise "handful" Youngkin claimed.

Nine states have no income tax, while 26 with the levy fully exempt military pensions. 

Virginia legislation

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

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

Fully implemented in 2024, the plan would save military veterans as much as $2,500 a 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 and would shield up to $20,000 from income taxes - half as much as the House. The plan would be phased in over four years.

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

Our ruling

Youngkin garbled facts when he said, "We are one of only a handful of states that actually taxes our veterans’ retirement."

Virginia is one of three states that fully tax military pensions. Twelve more states tax the pensions at reduced rates, which is what Youngkin wants to do in Virginia.

All told, 15 states tax military pensions. That’s a minority, but certainly more than the "handful" Youngkin describes.

We rate Youngkin's claim Half True.

 

Our Sources

Glenn Youngkin, Comments at the Leesburg Diner, Feb. 17, 2022 (6:05 mark)

Email from Macaulay Porter, press secretary for Youngkin, Feb. 21, 2022

Military Benefits, "States That Don’t Tax Military Retirement Pay," accessed Feb. 22, 2022

The Military Wallet, "Military Retirement Income Taxes by State – Which States Don’t Tax Military Retirement Pay?," Feb. 3, 2022

Legislative Information System, SB528, HB1128, 2022 session

Virginia Department of Taxation, Fiscal impact statements for SB528, HB1128

Virginia Department of Taxation, tax table, accessed Feb. 22, 2022

 

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Contrary to Youngkin, more than a 'handful' of states tax military pensions

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