General Assembly Raised Bill No. 1429 seeks to amend the current tax code by introducing a personal income tax deduction specifically for compensation received by military personnel serving in funeral honor guard details. The bill repeals subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 and replaces it with new provisions that allow for the subtraction of this compensation from gross income, effective July 1, 2025, for taxable years starting on or after January 1, 2025. This change reflects a commitment to support military personnel by providing financial relief through tax deductions while retaining existing provisions related to other income tax deductions.

In addition to the military honor guard compensation deduction, the bill proposes several other amendments to the tax code, including a tiered deduction schedule for pension and annuity income based on federal adjusted gross income, and specific deductions for contributions to manufacturing reinvestment accounts, financial assistance from the Crumbling Foundations Assistance Fund, and expenses incurred by organ donors. Starting January 1, 2024, the bill allows for a 50% subtraction of distributions from traditional IRAs, increasing to 100% by January 1, 2026. It also includes provisions for taxpayers licensed under marijuana-related chapters to claim certain expenses and addresses the tax treatment of common stock received under share plans and student loan reimbursements. The act is set to take effect on July 1, 2025, and aims to provide tax relief while promoting economic growth.

Statutes affected:
Raised Bill: 12-701
VA Joint Favorable Change of Reference: 12-701